Not all price endings are created equal: Price points and asymmetric price rigidity

Abstract

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If You Think 9-Ending Prices Are Low, Think Again

“…Recent studies offer evidence that are consistent with this interpretation. Levy et al (2019) report, based on lab experiments and field studies, that consumers use 9-endings as a signal for low prices. Using the same Dominick's data, along with Israeli retail price data, they find that retailers take advantage of the consumers' heuristic processing of 9ending price information, by strategically keeping prices at 9-endings more often after price increases than after price decreases.…”

“…Existing studies suggest that consumers perceive 9-ending prices as low because they tend to associate 9-endings with sale prices (see, for example, Schindler and Kibarian, 2001). However, Levy et al (2019) report that in Dominick's dataset, 9-ending prices are more common among regular prices than among sale prices. In other words, Levy et al (2019), analyzing the same dataset as we do here, find that regular prices are more likely to be 9-ending than sale prices.…”

“…In this paper, we revisit the question, but unlike Schindler (2001), who focuses his analyses only on 99-ending prices, we focus on 9-ending prices (99-ending prices are a 1 See, for example, Anderson et al (2015), Anderson and Simester (2003a, 2003b, 2009, Ater and Gerlitz (2017), Bader and Weinland (1932), Bhattacharya, et al (2012), Blinder et al (1998), Carver and Padgett (2012), Choi et al (2012), Gedenk and Sattler (1999), Gendall, et al (1998), Ginzberg (1936), Hackl et al (2014), Jeong and Crompton (2018), Kalyanam and Shively (1998), Kashyap (1995), Klenow and Malin (2011), Knotek (2019), Kreul (1982), Lee et al (2009), Levy et al (2011Levy et al ( , 2019, Macé (2012), Manning and Sprott (2009), Mathä (2009), Freling et al (2010), Ngobo et al (2010), Quigley and Notarantonio (1992), Ruffle and Shtudiner (2006), Schindler (1984Schindler ( , 1991Schindler ( , 2001Schindler ( , 2006, Kibarian (1993, 1996), Schindler and Kirby (1997), Schindler and Warren (1988), Shlain (2018), Snir et al (2017), Stiving and Winer (1997), Thomas andMorwitz (2005, 2...…”

Retail Pricing Format and Rigidity of Regular Prices

“…In general, "transaction prices" refer to "final prices" or "posted prices," which is the same as the "discounted prices" in case there is a discount or "regular prices" in case there is no discount. 2 Examples include Nakamura (2008), Nakamura andSteinsson (2008, 2013), , , Midrigan (2011), , , Beradi et al (2015), , , , Eden (2018), Nakamura et al (2018), DellaVigna and Gentzkow (2019), Levy et al (2020), Wu (2021), and the studies cited therein.…”

Interpolation and shock persistence of prewar U.S. macroeconomic time series: A reconsideration

“…The use of interpolation is not limited to the prewar data. For example,Levy and Chen (1994) employ the method of linear interpolation to construct quarterly values of the US postwar capital stock and capital stock depreciation series using the series' annual observations Levy et al (2020). apply linear interpolation to weekly retail scanner price data during the 1989−1997 period, to determine the values of missing observations.…”