Price Points and Price Rigidity

66 Pages Posted: 23 Jun 2011 Last revised: 28 May 2018

See all articles by Daniel Levy

Daniel Levy

Bar-Ilan University - Department of Economics; Emory University - Department of Economics; Rimini Center for Economic Analysis

Dongwon Lee

Korea University Business School

Haipeng (Allan) Chen

University of Kentucky - Gatton College of Business and Economics

Robert J. Kauffman

Singapore Management University; Singapore Management University - School of Information Systems

Mark E. Bergen

University of Minnesota - Carlson School of Management

Multiple version iconThere are 3 versions of this paper

Date Written: December 1, 2010

Abstract

We study the link between price points and price rigidity, using two datasets: weekly scanner data, and Internet data. We find that: “9” is the most frequent ending for the penny, dime, dollar and ten-dollar digits; the most common price changes are those that keep the price endings at “9”; 9-ending prices are less likely to change than non-9-ending prices; and the average size of price change is larger for 9-ending than non-9-ending prices. We conclude that 9-ending contributes to price rigidity from penny to dollar digits, and across a wide range of product categories, retail formats and retailers.

Keywords: Price Point, 9-Ending Price, Price Rigidity

JEL Classification: E31, L16, D80, M21, M30

Suggested Citation

Levy, Daniel and Lee, Dongwon and Chen, Haipeng (Allan) and Kauffman, Robert J. and Bergen, Mark E., Price Points and Price Rigidity (December 1, 2010). Review of Economics and Statistics, Vol. 93, No. 4, 2011; Mays Business School Research Paper No. 1870809; Bar-Ilan University Department of Economics Research Paper No. 2010-21. Available at SSRN: https://ssrn.com/abstract=1870809 or http://dx.doi.org/10.2139/ssrn.1870809

Daniel Levy (Contact Author)

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 5290002
Israel
+972 3 531-8345 (Phone)
+972 3 738-4034 (Fax)

HOME PAGE: http://econ.biu.ac.il/en/levy

Emory University - Department of Economics ( email )

1602 Fishburne Drive, Suite 306
Rich Building
Atlanta, GA 30322-0001
United States

HOME PAGE: http://economics.emory.edu/home/people/faculty/Levydaniel.html

Rimini Center for Economic Analysis ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

HOME PAGE: http://www.rcfea.org/

Dongwon Lee

Korea University Business School ( email )

Anam-Dong, Seongbuk-Gu
Seoul, 136701
Korea, Republic of (South Korea)

HOME PAGE: http://dongwon.info

Haipeng (Allan) Chen

University of Kentucky - Gatton College of Business and Economics ( email )

550 South Limestone
Lexington, KY 40506
United States

Robert J. Kauffman

Singapore Management University ( email )

Li Ka Shing Library
70 Stamford Road
Singapore 178901, 178899
Singapore
65-6828-929 (Phone)

Singapore Management University - School of Information Systems ( email )

80 Stamford Road
Singapore, 178902
Singapore

Mark E. Bergen

University of Minnesota - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States
612-624-1821 (Phone)

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