Journal article
Not all price endings are created equal: Price points and asymmetric price rigidity
Journal of monetary economics, Vol.110(forthcoming), pp.33-49
04/01/2020
DOI: 10.1016/j.jmoneco.2019.01.005
Abstract
We document an asymmetry in the rigidity of 9-ending prices relative to non-9-ending prices. Consumers have difficulty noticing higher prices if they are 9-ending, or noticing price-increases if the new prices are 9-ending, because 9-endings are used as a signal for low prices. Price setters respond strategically to the consumer-heuristic by setting 9-ending prices more often after price-increases than after price-decreases. 9-ending prices, therefore, remain 9-ending more often after price-increases than after price-decreases, leading to asymmetric rigidity: 9-ending prices are more rigid upward than downward. These findings hold for both transaction-prices and regular-prices, and for both inflation and noinflation periods. (C) 2019 Elsevier B.V. All rights reserved.
Details
- Title: Subtitle
- Not all price endings are created equal: Price points and asymmetric price rigidity
- Creators
- Daniel Levy - Bar-Ilan UniversityAvichai Snir - Netanya Academic CollegeAlex Gotler - Open University of IsraelHaipeng (Allan) Chen - University of Kentucky
- Resource Type
- Journal article
- Publication Details
- Journal of monetary economics, Vol.110(forthcoming), pp.33-49
- Publisher
- Elsevier
- DOI
- 10.1016/j.jmoneco.2019.01.005
- ISSN
- 0304-3932
- eISSN
- 1873-1295
- Number of pages
- 17
- Grant note
- DOI: 10.13039/501100004623, name: London Metropolitan University; DOI: 10.13039/501100002744, name: Bar-Ilan University; DOI: 10.13039/501100005717, name: University of Haifa
- Language
- English
- Date published
- 04/01/2020
- Academic Unit
- Marketing
- Record Identifier
- 9984618633602771
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