This Number Just Feels Right: The Impact of Roundedness of Price Numbers on Product Evaluations

Abstract

This research proposes that because rounded numbers are more fluently processed, rounded prices (e.g., $200.00) encourage reliance on feelings. In contrast, because nonrounded numbers are disfluently processed, nonrounded prices (e.g., $198.76) encourage reliance on cognition. Thus, rounded (nonrounded) prices lead to a subjective experience of "feeling right" when the purchase decision is driven by feelings (cognition). Further, this sense of feeling right resulting from the fit between the roundedness of the price number and the nature of decision context can make positive reactions toward the target product more positive and negative reactions more negative, a phenomenon referred to as the rounded price effect in the current research. Results from five studies provide converging evidence for the rounded price effect. Findings from the current research further show that merely priming participants with rounded (nonrounded) numbers in an unrelated context could also lead to the rounded price effect. Finally, this research provides process support by showing that the rounded price effect is mediated by a sense of feeling right. This is the first research examining the differential impact of roundedness of prices on product purchase decisions, based on whether the purchase decision is driven by feelings versus cognition. C onsider two consumers who are on the market to buy a camera for an upcoming family vacation. While one of them comes across a camera priced at $200.00, the other comes across the same camera at another store but priced at $198.76. Given that the camera has all the features required by these two consumers, how would the mere roundedness of the price number (200.00 vs. 198.76) affect their preference for the camera? Further, could the price number (200.00 vs. 198.76

Lasting performance: Round numbers activate associations of stability and increase perceived length of product benefits

“…This research shows that describing product characteristics in round (vs. precise) numbers increases the perceived length of the product's benefits and enhances product preferences. Past research has found differences in feelings, processing, and inferences for round versus precise numbers (Janiszewski & Uy, 2008; King & Janiszewski, 2011; Thomas & Park, 2013; Wadhwa & Zhang, 2014; Zhang & Schwarz, 2012; Xie & Kronrod, 2012). We suggest that as consumers accumulate life experiences in using numbers, they learn different associations for round versus precise numbers.…”

“…For instance, product claims with precise (vs. round) numbers (19.41% vs. 20%) are seen as more credible (Xie & Kronrod, 2012). Other work on numerical cognition has shown greater felt fluency for round (vs. precise) numbers (e.g., $365,000 vs. $364,578; King & Janiszewski, 2011; Wadhwa & Zhang, 2014), and precise (vs. round) numbers reduce adjustment from the anchor in anchoring effects (Janiszewski & Uy, 2008).…”

“…For instance, a drink's caffeine may be described as 100 or 102 mg (round vs. precise number; Dehaene & Mehler, 1992). Although these numbers' magnitudes are similar, systematic differences in how round and precise numbers are perceived and processed suggest that these numbers might differentially affect perceptions of product performance (King & Janiszewski, 2011; Wadhwa & Zhang, 2014; Xie & Kronrod, 2012).…”

“…Our work offers two important contributions to research on numerical cognition and product perceptions. First, past work on numerical cognition has documented that consumers have different feelings (King & Janiszewski, 2011; Wadhwa & Zhang, 2014) and inferences (Welsh, Navarro, & Begg, 2011; Xie & Kronrod, 2012) when using round versus precise numbers. Building on this, we propose that through the accumulation of life experiences in using numbers, consumers have learned different associations for round versus precise numbers.…”

Disconfirming Expectations: Incorrect Imprecise (vs. Precise) Estimates Increase Source Trustworthiness and Consumer Loyalty

“…For instance, 400 calories would be a more imprecise estimate than 417 calories because of the presence of two ending zeros. A growing body of work has shown that imprecision level influences source judgments in a number of contexts (Isaac, Brough, & Grayson, ; Jerez‐Fernandez et al, ; Pena‐Marin & Bhargave, ; Schindler & Yalch, ; Wadhwa & Zhang, ; Xie & Kronrod, ; Yan & Duclos, ; Zhang & Schwarz, ) including estimates (Hayward & Fitza, ; Jerez‐Fernandez et al, ; Mason et al, ; Yaniv & Foster, ). Building upon the above and other related work, we suggest that if an estimate is revealed to be inaccurate, then imprecise (vs. precise) estimates generate higher (lower) source trustworthiness because they (dis)confirm consumers’ initial accuracy expectations.…”