Journal article
End of 9-endings, price recall, and price perceptions
Economics letters, Vol.155, pp.157-163
06/01/2017
DOI: 10.1016/j.econlet.2017.04.001
Abstract
Prices that end with 9, also known as psychological price points, are common, comprising about 70% of the retail prices. They are also more rigid than other prices. We take advantage of a natural experiment to document an emergence of a new price ending that has the same effects as 9-endings. In January 2014, the Israeli government passed a new regulation prohibiting the use of non 0-ending prices, bringing an end to 9-ending prices. We find that seven months after 9-ending prices have disappeared, 90-ending prices acquired the same status as 9-ending prices had before the new regulation was adopted. Thus, 90-ending prices became the new psychological price points, partially eliminating the regulation’s intended effect.
Details
- Title: Subtitle
- End of 9-endings, price recall, and price perceptions
- Creators
- Avichai Snir - Netanya Academic CollegeDaniel Levy - Bar-Ilan UniversityHaipeng Allan Chen - Texas A&M University
- Resource Type
- Journal article
- Publication Details
- Economics letters, Vol.155, pp.157-163
- Publisher
- Elsevier
- DOI
- 10.1016/j.econlet.2017.04.001
- ISSN
- 0165-1765
- eISSN
- 1873-7374
- Language
- English
- Date published
- 06/01/2017
- Academic Unit
- Marketing
- Record Identifier
- 9984618642802771
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