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Sales Prices: How Right Digits Affect Perception of Discounts

Date:
September 1, 2007
Source:
University of Chicago Press Journals
Summary:
The amount of the discount may be less important than the numerical value of the farthest right digit, explains a new study. This newly identified visual distortion effect may influence how consumers look at sale prices. An item on sale for $211 from the original price of $222 is thought to be a better deal than an item on sale for $188 from an original price of $199, even though both discounts are $11.

The amount of the discount may be less important than the numerical value of the farthest right digit, explains a new study from the Journal of Consumer Research. Keith S. Coulter (Clark University) and Robin A. Coulter (University of Connecticut) are the first to identify a visual distortion effect that may influence how consumers look at sale prices.

The researchers show that "right-digit effect" influences consumer perception of sale prices. When the right digits are small, people perceive the discount to be larger than when the right digits are large. In other words, an item on sale for $211 from the original price of $222 is thought to be a better deal than an item on sale for $188 from an original price of $199, even though both discounts are $11.

In addition, the researchers find that when consumers view regular and sale prices with identical left digits, they perceive larger price discounts when the right digits are "small" -- less than 5 -- than when they are "large," or, greater than 5.

"When consumers examine multi-digit regular and sale prices in an advertisement, they read those prices from left-to-right. If the left (hundreds) digits are identical, consumers will pay less attention to those digits, and instead will focus primarily upon the disparate right-most (tens and units) digits in the price comparison process.," the authors explain.

"Our findings indicate that comparative price advertising can distort consumers' perceptions in ways unintended by the seller."

Reference: Keith S. Coulter and Robin A. Coulter. "Distortion of Price Discount Perceptions: The Right Digit Effect" Journal of Consumer Research: August 2007.


Story Source:

The above story is based on materials provided by University of Chicago Press Journals. Note: Materials may be edited for content and length.


Cite This Page:

University of Chicago Press Journals. "Sales Prices: How Right Digits Affect Perception of Discounts." ScienceDaily. ScienceDaily, 1 September 2007. <www.sciencedaily.com/releases/2007/08/070829122925.htm>.
University of Chicago Press Journals. (2007, September 1). Sales Prices: How Right Digits Affect Perception of Discounts. ScienceDaily. Retrieved April 18, 2014 from www.sciencedaily.com/releases/2007/08/070829122925.htm
University of Chicago Press Journals. "Sales Prices: How Right Digits Affect Perception of Discounts." ScienceDaily. www.sciencedaily.com/releases/2007/08/070829122925.htm (accessed April 18, 2014).

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