How Consumers Are Hopeless at Math(theatlantic.com)
theatlantic.com
How Consumers Are Hopeless at Math
http://www.theatlantic.com/business/archive/2012/07/the-11-ways-that-consumers-are-hopeless-at-math/259479/
1 comments
I've heard so many theories about this. Can someone shed some light...
Some say it's for psychological purposes, others claim it's got something to do with tax, and some say the cents value is used by the store to signify if an item is discontinued/on sale.
Some say it's for psychological purposes, others claim it's got something to do with tax, and some say the cents value is used by the store to signify if an item is discontinued/on sale.
I've heard it began when some shop assistants were, when selling an item, simply pocketing the payment for the goods themselves and never putting the money into the till. To counter this, the shop owners made it so that almost nobody would pay for an item with exact change, meaning that the transaction would have to be put into the till system in order to open the change drawer.
Interesting theory, no idea how accurate it is.
Interesting theory, no idea how accurate it is.
anothermachine: it's not just that numbers ending in nine "look smaller," as you put it. My understanding is that the 'number 9 signaling effect' works even when the price is higher. In other words, if a store prices the same item at (say) $9.81 for one week and then at $9.99 the subsequent week, the store sells more of the item on the second week (all else being equal). As the Atlantic article explains it, our brains have been conditioned to equate prices ending in 9 with "this is discounted," even when it isn't.
It's called the left-digit anchoring effect. Google it for an abundance of scholarly papers and other articles, if you're interested.
> We're obsessed with the number 9. Up to 65 percent of all retail prices end in the number 9. Why? Everybody knows that $20 and $19.99 are the same thing. But the number 9 tells us something simple: This thing is discounted. This thing is cheap. This thing was priced by somebody who knows you like things discounted and cheap.
Or it was priced by someone who knows that 1999 look smaller than 2000