Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/204666
Authors: 
Snir, Avichai
Levy, Daniel
Year of Publication: 
2021
Citation: 
[Journal:] Journal of the Association for Consumer Research [ISSN:] 2378-1823 [Volume:] 6 [Issue:] 1 (Forthcoming)
Abstract: 
9-ending prices, which comprise between 40%–95% of retail prices, are popular because shoppers perceive them as being low. We study whether this belief is justified using scanner price-data with over 98-million observations from a large US grocery-chain. We find that 9-ending prices are higher than non 9-ending prices, by as much as 18%. Two factors explain why shoppers believe, mistakenly, that 9-ending prices are low. First, we find that among sale-prices, 9-ending prices are indeed lower than non 9-ending prices, giving 9-ending prices an aura of being low. Second, at first, 9-ending prices were indeed lower than other prices. Shoppers, therefore, learned to associate 9-endings with low prices. Over time, however, 9-ending prices rose substantially, which shoppers failed to notice, because the continuous use of 9-ending prices for promoting deep price cuts draws shoppers’ attention to them, and helps to maintain-and-preserve the image of 9-ending prices as bargain prices.
Subjects: 
Behavioral Pricing
Psychological Prices
Price Perception
Image Effect
9-Ending Prices
Price Points
Regular Prices
Sale Prices
JEL: 
M30
M31
L11
L16
L81
D12
D22
D40
D90
D91
E31
Additional Information: 
Special Issue on Behavioral Pricing
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)
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