Price endings: Magic or math?
This thesis attempts to investigate the strategies that consumers employ in processing the prices and the effects of different price endings on the demand curve. Specifically, we want to address the following issues: (1) Do consumers process the price holistically or process the digits in a price differently? (2) Do consumers "round" prices? (3) Do price endings make differences in the actual demand curve from the continuous demand curve? Totally, 188 university students completed the online survey in two studies, 53 in Study One and 135 in Study Two. Results showed that respondents are more likely to process the price digits under $1 separately. Moreover, respondents may selectively use the rounding strategy in a certain price range. In addition, odd/even effects may occur only for the higher prices. Furthermore, the nine/zero ending effects exist on both price ranges. Finally, gender differences were examined. Implication for retailers and researchers are discussed.