Monday, September 23, 2013

Consumers Go Out of Their Way to Pay in Round Numbers


The Daily Stat / Harvard Business Review
September 19, 2013
Excerpt from Journal of Economic Psychology, Volume 36, June 2013, Pages 96-102, “Do consumers prefer round prices? Evidence from pay-what-you-want decisions and self-pumped gasoline purchases”

56% of purchases at a self-service gasoline pump in upstate New York ended in .00, well above what would be expected by chance, and an additional 7% ended in .01, likely reflecting failed attempts to stop the pump at whole-dollar amounts, says a team led by Michael Lynn of Cornell. The findings, along with data on tipping and a pay-what-you-want online scheme, show a pronounced consumer preference for round-number payment amounts, the researchers say.

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