Through five experiments, we provide a cognitive account of when and why nineending prices are perceived to be smaller than a price one cent higher. First, this occurs only when the leftmost digits of the prices differ (e.g., $2.99 vs. $3.00). Second, the left-digit effect also depends on the numerical and psychological distances between the target price and a competing product's price. The closer the two prices being compared, the more likely is the left-digit effect. Third, the leftdigit effect is not restricted to the domain of prices; it also manifests with other multidigit numbers.

Some food items that are commonly considered unhealthy also tend to elicit impulsive responses. The pain of paying in cash can curb impulsive urges to purchase such unhealthy food products. Credit card payments, in contrast, are relatively painless and weaken impulse control. Consequently, consumers are more likely to buy unhealthy food products when they pay by credit card than when they pay in cash. Results from four studies support these hypotheses. Analysis of actual shopping behavior of 1,000 households over a period of 6 months revealed that shopping baskets have a larger proportion of food items rated as impulsive and unhealthy when shoppers use credit or debit cards to pay for the purchases (study 1). Follow-up experiments (studies 2–4) show that the vice-regulation effect of cash payments is mediated by pain of payment and moderated by chronic sensitivity to pain of payment. Implications for consumer welfare and theories of impulsive consumption are discussed.

We examine two questions: Does the roundness or precision of prices bias magnitude judgments? If so, do these biased judgments affect buyer behavior? Results from five studies suggest that buyers underestimate the magnitudes of precise prices. We term this the precision effect. The first three studies are laboratory experiments designed to test the existence of the precision effect and examine the underlying psychological processes. In Study 1, we find that precise prices are judged to be smaller than round prices of similar magnitudes. For example, participants in this experiment incorrectly judged $395,425 to be smaller than $395,000. In Study 2, we show that precision is more likely to affect magnitude judgments under conditions of uncertainty. Study 3 demonstrates that manipulating prior experience with the pattern of roundness and precision in numbers can moderate the precision effect. Studies 4 and 5 examine whether the precision effect influences buyers' willingness to pay for negotiated purchases (e.g., houses). In Study 4, we conduct an experiment on a nationally representative sample of homeowners to demonstrate that participants are willing to pay more for houses when the sellers use precise (e.g., $364,578) instead of comparable round (e.g., $365,000) prices. In Study 5, we analyze data from residential real estate transactions in two separate markets and find that buyers pay higher sale prices when list prices are more precise. These empirical results enrich our understanding of the psychological processes that underlie price magnitude judgments and have substantive implications for buyer and seller behavior.behavioral pricing, numerical cognition, roundness, precision, heuristics, biases

Conspicuous consumption has often been decried as immoral by many philosophers and scholars, yet it is ubiquitous and widely embraced. This research sheds light on the apparent paradox by proposing that the perceived morality of conspicuous consumption is malleable, contingent upon how different moral lenses highlight the different characteristics embedded in the behavior. Utilizing the Moral Foundations Theory, we demonstrate that the individualizing values (i.e., equality and welfare) make people focus on the self-enhancing characteristics of conspicuous consumption, making it seem morally objectionable. However, the binding values (i.e., deference to authority, in-group loyalty, and purity) make people focus on the social identity signaling characteristic of conspicuous consumption, making it seem morally permissible. First, an archival dataset shows that the prevalence of the different moral values predicts per-capita spending on luxury goods across different countries. Then, 6 studies (N = 2903) show that the trait endorsement and the momentary salience of the different moral foundations can influence the moral judgment of conspicuous consumption as well as the propensity to engage in conspicuous consumption. Further, analyses show that the effect of the binding values (individualizing values) is mediated by heightened sensitivity to the social identity signaling (self-enhancing) aspects of conspicuous consumption. Finally, the studies demonstrate that the effect is moderated by the extent of social visibility during consumption. Thus, this research suggests that some moral values can, somewhat paradoxically, increase conspicuous consumption.

Consumers’ judgments of the magnitude of numerical differences are influenced by the ease of mental computations. The results from a set of experiments show that ease of computation can affect judgments of the magnitude of price differences, discount magnitudes, and brand choices. Participants seem to believe that it is easier to judge the size of a larger difference than that of a smaller difference. In the absence of appropriate corrective steps, this naive belief can lead to systematic biases in judgments. For example, when presented with two pairs of numbers, participants incorrectly judged the magnitude of the difference to be smaller for pairs with difficult computations (e.g., 4.97 – 3.96, an arithmetic difference of 1.01) than for pairs with easy computations (e.g., 5.00 – 4.00, an arithmetic difference of 1.00). The effect does not manifest when judgments do not entail mental computations or when participants are made aware that the ease or difficulty is caused by computational complexity. Furthermore, this effect is mitigated when participants’ prior experience is manipulated in a learning phase of the experiment. The results have implications for buyers and sellers and for understanding the role of metacognitive experiences in numerical judgments.