Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149558
Authors: 
Chen, Haipeng (Allan)
Levy, Daniel
Snir, Avichai
Year of Publication: 
2017
Abstract: 
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 parliament has passed a law prohibiting the use of non 0-ending prices. We find that one year after 9-ending prices have disappeared, 90-ending prices acquired the same status as 9-ending prices had before the law was passed. 90-ending prices became the new psychological price points. The retailers and the shoppers both reacted to the regulatory intervention optimally, which has eliminated the regulation’s intended effect.
Subjects: 
9-ending prices
psychological price points
sticky prices
price regulation
rigid prices
price recall
price control
integer constraint
JEL: 
E31
L16
K20
Document Type: 
Preprint

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