Price Points and Price Rigidity
نویسندگان
چکیده
We study the link between price points and price rigidity, using two datasets: weekly scanner data, and Internet data. We find that (i) “9” is the most frequently used price-ending for the penny, dime, dollar and ten-dollar digits, (ii) the most common price changes are those that keep the price endings at these “9” digits, (iii) the 9-ending prices are less likely to change in comparison to non-9-ending prices, and (iv) the average size of the price change is larger for the 9-ending prices in comparison to non-9-ending prices. Overall, we find that these 9-ending prices form a substantial barrier to price changes at all digits from pennies to dollars, across a wide range of product categories, retail formats and retailers.
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