“…the average person treats a price ending in .99 as if it were 15 to 20 cents lower.”
The tendency is called left-digit bias, when the leftmost digit of a number disproportionately influences decision-making. In this case, even though the real difference is only a penny, research shows that, to the average person, $4.99 seems 15 to 20 cents cheaper than $5.00 – which results in selling 3 to 5 percent more units than at a price of $5.00"
Well 5% more units when I have 1 unit to sell is still 1 unit. I’m not getting more money by doing this asshole psych 101 trick. Sooo I’ll stick with being a decent person.
I don’t really understand the “decent person” comment.
Left-digit bias is a default way that the human brain works.
Humans also tend to like fat, sugar, and salt. So, when you go to a restaurant if they add more butter to a recipe than you would at home are they unethical?
It’s not decent to use psychological manipulation on others in order to benefit yourself. As they said, why go r through this just to earn an extra $5 when selling a single vehicle?
You mean 5$ less
if you have a car for sale and want $10,000 you list it for $12,000 OBO
Which is exactly validating what I wrote in my post title…people watch merchants use the left-digit bias and then go ahead and use whole numbers when they sell their own items. That’s what the post is all about!
No, this is proving the use case different: Your logic would put the car at 9995, to present it as cheap. The actual advice is to put it at 12000, higher, to present it as expensive, and then “allow” the buyer to haggle you down.
No, the actual advice is to not use whole/round numbers. So, 11,999 or 11,995 is better than 12,000 due to left-digit bias.
Not if the intention is to make it look expensive. Bugatti’s don’t sell fot 499999.
Plenty of people are trying to deny that this effect exists or that it works. You can create a bunch of hypothetical one off straw man arguments where left-digit bias may or may not be the best solution or be irrelevant to the chain of events that make the sale happen. However, the act of pricing things at 99, 98, 95 etc. has been around for 140 years and has been studied by psychologists, marketers, and corporations.
All of the resistance to pricing things using left-digit bias present in this thread validates my post title. Merchants have been pricing that way for 140 years and yet when people sell their own items they don’t - and as this thread shows they don’t for a variety of reasons but none of those reasons makes the effect not real.
Why the hell is the post so controversial? Merchants do this, individual people do not. That’s it.
The problem isn’t the effect, the problem is you don’t seem to understand what it actually does. The idea is to reduce the price in such a way that a small discount appears larger, increase sales, and make the reduction back in volume. It works, and makes sense, and is done, if and only if you compete on price and trade in volume.
Your title is, at the time of writing: “People live their whole lives watching corporations end prices with 99 yet when they list their own items for sale they choose a whole round number and never question it.” This thread is full of people giving you reasons why they don’t or wouldn’t do that, meaning they clearly do question it, and are deciding against it.
Thats just the whole second hand market strategy. First bid is always close to 70% of the asking price, so you make sure that 70% is actually what you want for it.
Still 3-5% more possible buyers for your car by the logic I guess. Not that I agree with the system but marketing is fucked.