A meta‐analysis on the effects of just‐below versus round prices

Abstract

Marketers' proclivity for just‐below prices (e.g., $9.99) is rooted in an expected higher demand than for round prices ($10.00). The literature, however, lacks a comprehensive assessment of when and how price endings matter. Three mechanisms might explain price‐ending effects on consumers' purchase decisions: just‐below prices (1) improve price perceptions, but (2) impair perceived product quality, and (3) cause consumers to underestimate prices. A preregistered meta‐analysis (k = 69 studies, m = 362 effect sizes, N = 40,541) established that just‐below (vs. round) prices tend to increase purchase decisions (g = 0.13, CI95%[0.01, 0.25]), result in an advantageous price image (g = 0.28, CI95%[0.09, 0.48]), have no effect on perceived product quality (g = 0.00, CI95%[−0.17, 0.18], p = 0.96), and are more often underestimated (g = 0.67, CI95%[0.04, 1.30]). Participant, study, price, and product characteristics moderate the magnitude of these effects. Overall, the effect sizes are small and highly heterogenous, p‐curve analyses revealed a large proportion of nonsignificant effects, and publication bias corrections suggest smaller and, at times, nonsignificant true effects. We discuss theoretical and applied implications for the pricing literature.

50 Years of Anchoring: A Meta-Analysis and Meta-Study of Anchoring Effects

“…This cross-discipline meta-analysis also has conceptual connections to several other ideas that span Psychology and Economics (among other disciplines) that have been meta-analyzed in recent years, such as those of variants of the endowment effect and loss aversion (Brown et al, 2021;Yechiam et al, 2017). Finally, more proximally within numeric cognition, there have been related meta-analyses within round numbers as prices (Troll et al, 2023) and partitioned (vs. non-partitioned) prices (Abraham & Hamilton, 2018).…”

The influence of the base option’s price format on tourists’ upgrade intention: the moderating role of tourists’ mindsets

“…The pricing strategy (Gibbs et al , 2018) has often been adopted by tourism and hospitality managers for revenue management (Denizci Guillet and Mohammed, 2015). Just-below prices and round prices are the two most common pricing strategies in tourists’ decision-making (Troll et al , 2023). A “just-below price” refers to a pricing strategy in which the managers set the product or service’s price slightly below a round number (Manning and Sprott, 2009).…”