

The Psychological Difference Between $12.00 and $11.67 - pmcpinto
http://www.theatlantic.com/business/archive/2015/01/the-psychological-difference-between-1200-and-1167/384993?single_page=true

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sjwright
I've always seen the difference between round numbers as being a question of
arbitrariness.

If the price for a new TV is exactly $1,000 it strikes me as a price that was
arrived at arbitrarily. $999 just gets rounded up in my head. Whereas when I
see an amount like $1,012 I feel like -- rightly or wrongly -- that there must
be some logic behind the price. That it represents a price set for a reason
other than mere marketing.

~~~
Igglyboo
I see this a lot with bidding for government contracts, it's a known trick.
There's a sign near me describing the new pipes going into the ground
replacing the ditches, it says the contract went to some company for something
like $12,345,122 (not sure what the real number is, just an example). I've
seen similar numbers on signs at my university describing contracts for new
buildings.

~~~
mikeash
Amusingly, this sort of thing happened with the first measured height of Mount
Everest. It was measured at exactly 29,000ft, but they fudged it to 29,002ft
so it didn't look like an estimate.

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anulman
Source:
[http://www.jstor.org/discover/10.2307/2684102?sid=2110577666...](http://www.jstor.org/discover/10.2307/2684102?sid=21105776664453&uid=2&uid=4)

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GotAnyMegadeth
Not really related. When the N64 had been out for a while it was £99.99. My
brothers and I begged for it, but my mum said it was too expensive and she
would consider it when the price went down. Later that week we were all
watching the TV together and an advert for the N64 came on, and at the end it
said "Buy now for £99.98!". We all celebrated until my mum said that didn't
count. We never got one in the end.

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bluetidepro
I liked your story, but was bummed at the end "We never got one in the end."
Haha You should go out and get one online now! You deserve it! ;) haha

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TheAdamist
When i took a trip to Paris from the US a while ago i thought it was awesome
how tax was included, and the majority of the prices were even or multiples of
useful coins, so that .20euro coins were the smallest i needed to worry about.

That and its super easy to figure out how much you owe when its simpler
numbers with tax included.

until that one store who used .99 or other oddness everywhere and now i had a
pocket of "useless" tiny coins to deal with.

~~~
elros
FWIW I've been in tens of countries and the only place which does __not
__include taxing in the price was the US.

Regarding the other subject in your comment, I think this sort of
initiative[0] by certain countries is definitely commendable.

[0]
[http://en.wikipedia.org/wiki/Euro_coins#Price_rounding](http://en.wikipedia.org/wiki/Euro_coins#Price_rounding)

~~~
ars
> I've been in tens of countries and the only place which does not include
> taxing in the price was the US.

You need to visit more countries then.

The reason for not including the price is that taxes can vary by city. Which
makes is impossible to place an advertisement that lists the price in a wide
area.

Any country that has local sales tax will be like the US in this.

And I personally think the US should just round to the tens place and forget
both the nickel (5 cent) and the penny entirely. They'll have to issue a new
coin in place of the quarter (25 cent) so it'll never happen, but it would be
nice.

~~~
corin_
I've been to ~15 countries in Europe, a couple in Asia and the USA. The latter
was the only place I've witnessed it. That's not to say it's the only place it
happens, but it certainly seems anecdotally to be a rarity.

Maybe instead of a snide reply to your parent comment you could've given an
example of another country than the US to have this issue caused by
regionalised sales tax differences?

~~~
ars
Canada.

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informatimago
Numeric system with negative digits are interesting in this respect. If you
read 11.67 as actually 12.3̅3̅ (with 3̅ = -3), then it becomes clear that you
need to give a ten and two bills, and get some change.

Or said otherwise, when paying, you should round up in your mind, not down...

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andy_ppp
Apparently you make much more money (in a restaurant setting at least) if you
omit the currency, use round numbers and no decimals.

Rabbit with oyster and samphire - 7

Rabbit with oyster and samphire - £7.00

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feintruled
Yeah, I nearly got caught out once when I went to a restaurant and ordered
wine "number 23", thinking it was like a Chinese Takeaway menu or something. I
was wondering why there weren't in order! Got an odd look from the waiter too.
Lucky I didn't go for wine number 200.

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Aoyagi
It's a form of (marketing?) deception, isn't it? One that's been running for
so long that it altered how people perceive prices. Am I the only one who
doesn't like these kind of practices?

~~~
Bahamut
I don't either, but my method of countering it is to round the price to the
nearest dollar in general.

~~~
Aoyagi
I think most people do that, question is whether that also negates any
subconscious perception modifiers (sorry, I don't know what else to call
that). Like when "feel good" commercials make you associate the product with
good feelings unless you actively resist that.

(Disclaimer: I hate this kind of advertising)

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MarkMc
I understand that sales are greater with a price of $59.99 rather than $60.
But _how much_ greater? Can anyone point to an article that quantifies the
effect?

~~~
Jackim
Here is an interesting study done on it. PDF warning.

[http://www.jem.org.tw/content/pdf/Vol.9No.2/06.pdf](http://www.jem.org.tw/content/pdf/Vol.9No.2/06.pdf)

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orky56
In design (UIs, pricing, etc.), there is a constant battle for attention &
processing between emotional and cognitive. Round numbers and solid icons are
understood and don't set off mental red flags. When things become more
difficult to understand, we either assume (correctly or incorrectly) or have
no choice but to make an effort to fight those expectations.

On reddit, there are popular subreddits like /r/oddlysatisfying,
/r/mildlyinfuriating, and /r/mildlyinteresting that demonstrate intrinsic
attraction and repulsion to said expectations.

In the world of interface design, there's been some debate regarding solid vs
hollow icons in terms of processing. Here's a well researched article that
sheds some light: [http://viget.com/inspire/are-hollow-icons-really-harder-
to-r...](http://viget.com/inspire/are-hollow-icons-really-harder-to-recognize-
a-research-study)

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kyledrake
Our supporter plan for neocities.org is $5. We talked about saying $4.99, but
I felt that this is deceptive marketing so we didn't do it.

To me, it's a tradeoff between the possible increases in signups you get from
using a .99 price, and the level of trust you potentially lose from engaging
in psychological manipulation of your users.

I'm comfortable with $5, even if it does cost a few customers. Being
straightforward with our pricing builds a story of trust and honesty that I
like.

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boca
Not that it is related a lot but reminded me of this

[https://news.ycombinator.com/item?id=8274084](https://news.ycombinator.com/item?id=8274084)

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svachalek
Interesting. I've actually read that it's for a different psychological
reason: nines are big numbers, and make others look smaller. So in $20.00 you
have a first digit of 2 and inconsequential zeroes, but in $19.99 you start
with a 1 and make it look even smaller next to the imposing nines.

(Wish I could remember the source but I don't.)

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spaulo12
What about gas prices? Why do we, as a country, put up with "$2.59 9/10" as a
price? It's ridiculous.

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ac29
Status quo? I dont see it as any different than "putting up" with $x.99
prices, its just not enough of a difference to change behavior. The quirky gas
prices date back to a time when gas cost $0.25/gallon, so the 24 & 9/10 cents
was a significant margin increase (vs 24 cents) on a product that was, and is,
a low margin product (at least at retail).

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hotgoldminer
11.67 is practially less than 7.50...

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rasz_pl
Personally I find it insulting. 9.99 prices are designed to deceive, their
sole purpose is to hook you, anchor your decision process on MEANINGLESS
numbers. When I see prices like that I know its a scammy place, and they
designed it thinking Im a sucker.

Sooner you learn to ignore them the better for you as a consumer.
Metacognition will set you free.

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icantthinkofone
This isn't the first time where I've read that someone doesn't understand why
prices end in .99 and I'm surprised no one seems to know though someone in the
comments in the article came close.

I've owned restaurants for 30 years. When I first got into the business, I was
told to always end our prices in "9" because when you add up the prices of
items you sold, it should always end as .....

And that is where I, too, have forgotten. It was an accounting thing as
mentioned in the comments. Should be easy to Google or look up. I don't know
if anyone does it for that reason anymore. We certainly don't.

I'll leave looking that up as an exercise to the reader.

~~~
learnstats2
If .99 is used consistently, the distance to the nearest whole number tells
you how many items were sold, which is useful as double-check (also
subconsciously).

39.94 = 6 items

~~~
nostromo
But if this was the reasoning ending in .01 would surely make more sense.

39.06 = 6 items

79.59 = 59 items

~~~
learnstats2
Change giving becomes much more difficult.

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logfromblammo
Just apply a $0.01 discount at the register for customers paying in cash. Your
total is $34.06, with a $0.06 discount. Your change is a $1 and a $5 from $40.
Thank you, come again.

A $0.01 discount is a lot easier to swallow than an additional $0.01 change-
making fee on each item.

~~~
sparkie
The arithmetic would be too much for a large number of tillers, who can't do
much more math than count change.

This still misses the other main purpose of the .99p, which was to force the
tiller to open the till to get the change (thus, reducing the likelihood that
they might just pocket the money handed to them).

