Price Points and Price Rigidity

Author

Daniel LEVY
Dongwon LEE
Haipeng (Allen) LEE
Robert J. Kauffman, Singapore Management UniversityFollow
Mark Bergen

Publication Type

Journal Article

Version

publishedVersion

Publication Date

11-2011

Abstract

We study the link between price points and price rigidity using two data sets: weekly scanner data and Internet data. We find that ‘‘9’’ is the most frequent ending for the penny, dime, dollar, and ten-dollar digits; the most common price changes are those that keep the price endings at ‘‘9’’; 9-ending prices are less likely to change than non-9-ending prices; and the average size of price change is larger for 9-ending than non-9- ending prices. We conclude that 9-ending contributes to price rigidity from penny to dollar digits and across a wide range of product categories, retail formats, and retailers.

Discipline

Computer Sciences | Management Information Systems | Numerical Analysis and Scientific Computing

Research Areas

Information Systems and Management

Publication

Review of Economics and Statistics

Volume

93

Issue

4

First Page

1417

Last Page

1431

ISSN

0034-6535

Identifier

10.1162/REST_a_00178

Publisher

MIT Press

Citation

LEVY, Daniel; LEE, Dongwon; LEE, Haipeng (Allen); Kauffman, Robert J.; and Bergen, Mark. Price Points and Price Rigidity. (2011). Review of Economics and Statistics. 93, (4), 1417-1431.
Available at: https://ink.library.smu.edu.sg/sis_research/2186

Copyright Owner and License

Publisher

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Additional URL

https://doi.org/10.1162/REST_a_00178