Price Points and Price Rigidity

Daniel Levy (), Dongwon Lee, Haipeng (Allan) Chen (), Robert J. Kauffman and Mark Bergen
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Dongwon Lee: Korea University
Robert J. Kauffman: Singapore Management University
Mark Bergen: University of Minnesota

The Review of Economics and Statistics, 2011, vol. 93, issue 4, 1417-1431

Abstract: We study the link between price points and price rigidity using two data sets: weekly scanner data and Internet data. We find that “9” is the most frequent ending for the penny, dime, dollar, and ten-dollar digits; the most common price changes are those that keep the price endings at “9”; 9-ending prices are less likely to change than non-9-ending prices; and the average size of price change is larger for 9-ending than non-9-ending prices. We conclude that 9-ending contributes to price rigidity from penny to dollar digits and across a wide range of product categories, retail formats, and retailers. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2011
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Journal Article: Price Points and Price Rigidity (2011)
Working Paper: Price Points and Price Rigidity (2011)
Working Paper: Price Points and Price Rigidity (2010)
Working Paper: Price Points and Price Rigidity (2007)
Working Paper: Price Points and Price Rigidity (2007)
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