Washington, February 24 (ANI): When it comes to shopping, most people look at the prices' leftmost digits to determine whether items before them are affordable or not, according to a new study.
"Shoppers pay a disproportionate amount of attention to the leftmost digits in prices and these leftmost digits impact whether a product's price is perceived to be relatively affordable or expensive," write authors Kenneth C. Manning of Colorado State University, and David E. Sprott of Washington State University.
Describing the study in the Journal of Consumer Research, the authors revealed that in one of the experiments, the participants were asked to consider two pens, one priced at 2.00 dollars and the other at 4.00 dollars.
The researchers said that the leftmost digit of the price could be lowered by decreasing a penny.
They decided to manipulate the prices, and found that when the pens were priced at 2.00 dollars and 3.99 dollars, 44 percent of the participants selected the higher-priced pen.
However, when the pens were priced at 1.99 dollars and 4.00 dollars, only 18 percent of the participants chose the higher-priced pen.
"The larger perceived price difference between the pens when they are priced at 1.99 dollars and 4.00 dollars led people to focus on how much they were spending and ultimately resulted in a strong tendency to select the cheaper alternative," the authors said.
The research team further tested the impact of two "round prices", such as 30.00 dollars and 40.00 dollars, and two "just-below prices", such as 29.99 dollars and 39.99 dollars.
"When we showed people these sets of prices, most perceived the two round prices to be more similar to one another than the two just-below prices. Based on the perceived price differences, we predicted that people would focus less on how much they were spending when presented with round prices, and as a result, a relatively large percentage of people would opt for the 40.00 dollars option," the authors say.
However, when buying a gift for a very close friend or when a purchase only involves a few dollars, the authors found that rounding or just-below pricing had no impact on choice.
"Consumers should be aware of the subconscious tendency to focus on the leftmost digits of prices and how this tendency might bias their decision-making," write the authors. (ANI)