Psychological prices at retail gasoline stations: the policies of 0-, 5-, and 9-ending prices

Abstract

Psychological prices are known to impact consumer behavior and to depend on retailers' characteristics. Less understood is last digit pricing, especially in the context of retail gasoline stations. We study price endings in the French gasoline market with 11,471 gas stations and 4,775,300 prices for oil companies, supermarkets, and independent retailers during five years. Raw data suggest that 0-ending prices are more expensive. Yet, these last digit effects do not survive careful scrutiny focusing on the individual behavior/distribution of each gas station. Plus, 9-, 0-, and 5-ending prices are over-represented. Our evidence better informs administrative authorities investigating market irregularities and consumers interested in better deals.

Left‐digit biases: Individual and institutional investors

“…First, this study remains silent about the overrepresentation of certain quotes including those ending with zeros and fives, as shown in Table 2, because it focuses on the impact of left‐digit numbers. Investigating the pattern of quote changes and its underlying mechanism will be an additional research subject (e.g., Dehaene, 1992; Huck et al, 2021). Second, the variation of the left‐digit bias by investor type can further be analyzed by distinguishing between opening and closing positions.…”