Two plus two equals six: an alternative explanation of why so many goods prices end in nine

The prevalence of prices ending in 99 cents is explained as the result of rational consumers rounding prices up. Monopolists are shown to be harmed by this practice whereas consumers may gain. The model is compared with two other models: Basu's (1997) model and one which assumes consumers round prices down.

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Year of publication:	2007-07
Authors:	Demery, David ; Duck, Nigel W.
Institutions:	School of Economics, Finance and Management, University of Bristol
Subject:	Consumer rationality \| price perception \| pricing

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Extent:	application/pdf
Series:	Bristol Economics Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	11 pages
Classification:	A10 - General Economics. General ; D40 - Market Structure and Pricing. General ; L12 - Monopoly; Monopolization Strategies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005135195