Affiliation:
1. Institute of Management and Organization Leuphana University of Lüneburg Lüneburg Germany
2. Department of Psychology Saarland University Saarbrücken Germany
Abstract
AbstractMarketers' proclivity for just‐below prices (e.g., $9.99) is rooted in an expected higher demand than for round prices ($10.00). The literature, however, lacks a comprehensive assessment of when and how price endings matter. Three mechanisms might explain price‐ending effects on consumers' purchase decisions: just‐below prices (1) improve price perceptions, but (2) impair perceived product quality, and (3) cause consumers to underestimate prices. A preregistered meta‐analysis (k = 69 studies, m = 362 effect sizes, N = 40,541) established that just‐below (vs. round) prices tend to increase purchase decisions (g = 0.13, CI95%[0.01, 0.25]), result in an advantageous price image (g = 0.28, CI95%[0.09, 0.48]), have no effect on perceived product quality (g = 0.00, CI95%[−0.17, 0.18], p = 0.96), and are more often underestimated (g = 0.67, CI95%[0.04, 1.30]). Participant, study, price, and product characteristics moderate the magnitude of these effects. Overall, the effect sizes are small and highly heterogenous, p‐curve analyses revealed a large proportion of nonsignificant effects, and publication bias corrections suggest smaller and, at times, nonsignificant true effects. We discuss theoretical and applied implications for the pricing literature.
Funder
Deutsche Forschungsgemeinschaft
Subject
Marketing,Applied Psychology