Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/202536
Authors: 
Levy, Daniel C.
Snir, Avichai
Gotler, Alex
Chen, Haipeng
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 2019-01
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 no-inflation periods.
Subjects: 
Asymmetric Price Adjustment
Sticky/Rigid Prices
9-Ending Prices
Psychological Prices
Price Points
Regular/Sale Prices
JEL: 
E31
L16
C91
C93
D80
M31
Document Type: 
Working Paper

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