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.
Computer Sciences | Management Information Systems | Numerical Analysis and Scientific Computing
Information Systems and Management
Review of Economics and Statistics
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. Research Collection School Of Information Systems.
Available at: http://ink.library.smu.edu.sg/sis_research/2186
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