Distortion of price discount perceptions through the left-digit effect

Chien Huang Lin, Jyh Wen Wang

Research output: Contribution to journalArticlepeer-review

11 Scopus citations

Abstract

Through two experiments, we examined the consumers’ process of comparison of regular and sale price information in advertisements. This is an extension of studies of the left-digit effect with different price levels and multiple digits conducted using Taiwanese data. First, we find that in a comparison of regular and sale prices, specifically three-digit integers with different leftmost digits, consumers perceive the price discount to be larger when the left digit is small (e.g., 1 or 4) than when it is large (e.g., 7). The lower the two prices being compared, the more likely it is that the left-digit effect will exist. Second, the perceived discount is likely to diminish when the number of digits is increased to produce a four-digit integer. In other words, the number of digits can affect perceptions of the numerical difference when comparing two prices. Thus, the effect of a left-digit change to produce a nine-ending price would be weaker for higher-priced products. The findings indicate the existence of a novel boundary to the left-digit effect.

Original languageEnglish
Pages (from-to)99-112
Number of pages14
JournalMarketing Letters
Volume28
Issue number1
DOIs
StatePublished - 1 Mar 2017

Keywords

  • Left-digit effect
  • Nine-ending price
  • Number of digits
  • Price endings
  • Weber–Fechner law

Fingerprint

Dive into the research topics of 'Distortion of price discount perceptions through the left-digit effect'. Together they form a unique fingerprint.

Cite this