Not all price endings are created equal: Price points and asymmetric price rigidity

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2019-01

Classification and Topics

• Classification: Wirtschaft ; Price Level; Inflation; Deflation ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices ; Design of Experiments: Laboratory, Individual ; Field Experiments ; Information, Knowledge, and Uncertainty: General ; Marketing
• Subject: Asymmetric Price Adjustment ; Sticky/Rigid Prices ; 9-Ending Prices ; Psychological Prices ; Price Points ; Regular/Sale Prices

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Levy, Daniel C. ; Snir, Avichai ; Gotler, Alex ; Chen, Haipeng
• Event: Veröffentlichung
• (who): Bar-Ilan University, Department of Economics
• (where): Ramat-Gan
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/202536
• Last update: 10.03.2025, 11:44 AM CET