Talk:Psychological pricing/Archives/2012

Wisniewski and Blattberg

The methodology of the Wisniewski and Blattberg study has been challenged. The non-linear nature of the demand curve is not in and of itself evidence of psychological pricing. The evidence they found can be explained with a smooth curve. If psychological pricing is true, you will find sharp discontinuities in the curve. Rossami

I agree with you that "The non-linear nature of the demand curve is not in and of itself evidence of psychological pricing." There are at least two other potential causes of price points. In fact, that is one of the reasons why there is so much room for controvercy: One researcher looks at the data and says this is due to odd number pricing, while another interprets it as resulting from the pricing of close substitutes.

I do not agree however that the research is consistant with a linear demand curve. If the research indicates significant changes in the quantity demanded at certain prices, this must be reflected in the shape of the demand curve.

(I meant non-linear as in "no discontinuities", not that the curve was a straight line. Sorry for the confusion. Interesting point below. I'll have to relook the data. Rossami)

As for your claim that "If psychological pricing is true, you will find sharp discontinuities in the curve.", I look at that as a sample size issue. The more respondants in the survey (or purchase lab experiment), the greater the number of data points, and the more continuous the curve. If you are constructing a demand curve for a single individual, there would be discontinuities, but as you add more respondents to the curve, the gaps would fill in. Because of this, the demand curve is drawn as continuous even though the researcher may not have obtained a data point for every value within the range of the graph. mydogategodshat 10:49, 9 May 2004 (UTC)

removed section

I've removed the paragraph below. I was attempting to clean up the grammar of the section but ultimately decided that I could not figure out what the original author meant. The paragraph as written is self-contradictory. I've moved it here in case someone else can fix it. Rossami (talk) 19:52, 9 August 2006 (UTC)

Given that the parity of wholesale prices is evenly distributed, it is unnatural that sale prices end more frequently in odd numbers. In modern times, this is due largely to the fact that psychological pricing produces numbers ending in nine.

The author was apparently distinguishing between wholesale prices and sale prices (i.e. selling to retailers and selling to consumers). He was saying that it might seem odd that the prices are different in that way, but that it makes sense when psychological pricing is taken into account. Tom Stringham 20:19, 15 August 2006 (UTC)

Search-terms pricing policy

It is easy to see on some sites (for example Autotrader.co.uk) that products are listed at .99 or .95 prices in order to be 'higher up' the low-high price search for products. As a result I have noticed a creeping move (online only) to price things are increasingly unusual prices such as £1,989 or £1,985. This way the person is sacrificing £10/15 to be in the first few pages of the search terms for cars in that price region. Is this worth trying to find a referenced source to add this in or is it so trivial it isn't worth the effort? ny156uk 15:43, 3 December 2006 (UTC)

I've been seeing the same thing and have wondered if the trend is real or just sampling bias among my own observations. If you can find a published study on this trend (whether the hypothesis was confirmed or rejected), I think that would be an excellent addition to the encyclopedia. I'm not sure if it would strictly fall under "psychological" pricing but it would definitely belong in one of our pricing articles. Rossami (talk) 01:01, 5 December 2006 (UTC)

tagged for cleanup

Although the article badly needs references, even that is no big deal given the topic. That can be dealt with. But at very least, conclusory phrases such as "Now that consumers|consumers are used to ..." should be taken out entirely. dr.ef.tymac 15:04, 8 July 2007 (UTC)

The above-mentioned line, "Now that many customers are used to odd pricing, some restaurants and high-end retailers such as Nordstrom psychologically-price in even numbers in an attempt to reinforce their brand image of quality and sophistication" is a bit ambiguous as well. By "even numbers" does it mean whole dollars/pounds/etc., or that the last digit is an even numeral (0,2,4,6,8)? — Preceding unsigned comment added by 71.63.69.193 (talk) 22:17, 27 January 2012 (UTC)

More digits = worse judgement?

I expect that the .99 pricing has many causes, some of which are already on the page, but I have an additional theory that I haven't yet seen proposed.

There was an experiment made by Baba Shiv, a professor of marketing at Stanford, and described in the Radiolab's "Morality" show, which went like this: a person was given a piece of paper with a number on it, he was then asked to memorize the number, go to the room down the hall, and recall it. Half the people received a two-digit number, whereas the other half got seven-digits.

When they went out and started walking down the hall to the other room, a lady with a food tray approached them and offered a choice between a piece of chocolate cake, and a piece of fruit. Turns out that people who were trying to remember the seven-digit number chose cake (the easy choice) more often, and people with the two-digit number chose fruit (the healthy choice) more often. The difference was statistically significant (up to 40 points).

What I propose is that one of the reasons for prices ending in .99 instead of rounded up is that they're longer, therefore more difficult to remember, and therefore they tend to mess with our logical thinking and judgement. —Preceding unsigned comment added by Jestempies (talk • contribs) 19:54, 18 November 2009 (UTC)

Rounding up/down at the register

In most european countries prices are rounded up or down to the nearest 5 cents. (whichever is closer) I asked a friend who studies marketing why even though they round it off anyway I still find 99 everywhere. He told me it pushes the customer to buying one or two other items so it rounds off in their favour. Nice theory? 86.83.228.117 (talk) 18:03, 25 June 2010 (UTC)

I assumed that what I called "just under" pricing was because of taxes, tarrifs, and other constraints that were defined by dollar amounts, so to avoid being in the next higher bracket, a merchant would price the good at a penny less. Could that be a more original reason for this? —Preceding unsigned comment added by 173.13.170.93 (talk) 21:53, 10 December 2010 (UTC)

Draper's Disease

Have seen this referred to as "Draper's Disease" after an old use of it in England. Any collaboration? -- Ralph Corderoy (talk) 11:17, 3 March 2011 (UTC)

Link does not work

"Image communicated by the use of 99 endings in advertised prices" — Preceding unsigned comment added by 2.138.173.110 (talk) 16:15, 7 November 2011 (UTC)

Non-decimal currency

Did pre-1971 Britain have things priced at 19 shillings and 11 pence? DanBishop (talk) 02:05, 4 April 2012 (UTC)

As I recall 19/6d was more common than 19/11d.Thelauges (talk) 21:35, 19 June 2012 (UTC)

UK ha'penny

The following text seems to contradict itself: "In the UK, before the withdrawal of the halfpenny coin in 1969, prices often ended in 99½."

1969 (and earlier) was pre-decimalisation and therefore it seems unlikely that you would have found prices like 99½d simply because 100 pennies wasn't a 'round number' and I'm pretty sure that any number of pennies over 11½d would have been expressed in shillings (so 100d would have been 8s 4d making 99½ 8s 3½d). Examples of pre-decimal slightly less than whole numbers would be 11½d (just under a shilling), 19s 11½d (just under a pound), things like that.

Now the thing is... we did have a half (new) penny for a while post-decimalisation, meaning that 99½p could well have existed (and would have been just under a pound). I honestly don't know in which way this text is wrong. Is it the round price that's wrong or the year? eyeball226 (talk) 13:56, 6 April 2012 (UTC)

I've fixed this to say prices ended in 11½d, as you suggest. Prices over one shilling were almost always shown in shillings and pence. I do not recall seeing 99½p in common use post-decimalization.Thelauges (talk) 21:42, 19 June 2012 (UTC)

Making the till open?

I have heard it claimed that the practice may have arisen because a x.99 price would require the cashier to open the till to give change, therefore meaning the sale would have to be registered. With a whole number price, a dishonest cashier could simply pocket the money paid themselves. Is this true, and if so is there a good source? M0ffx (talk) 23:53, 15 February 2011 (UTC)

I heard that theory years ago from my Marketing professor at Carnegie Mellon. And the hypothesis is already in the article. (See the second paragraph of the Historical Comments section.) Unfortunately, we have been unable to definitively source the hypothesis so far. If you can find a source, that would be a great help. Rossami (talk) 04:16, 16 February 2011 (UTC)

This strikes me as a bit dubious. You would need to open the till to make change for say an item priced at $1.00 if the customer did not have a dollar bill or change totaling exactly $1.00; and conversely, would not have to open the till if the customer had exactly $0.99 in change. And ultimately, sales tax tends to foul this all up anyway, even though it isn't clear to me to what extent any sales or similar point of sales taxes might have been in effect at the time/place of the cash register's invention. Furthermore, even late in the 20th century, not all businesses used cash registers. Wschart (talk) 18:55, 24 December 2012 (UTC)