Simple Complexity

Price Perceptions: The Right-Digit Effect

A recent study appearing in ScienceDaily found:

The amount of the discount may be less important than the numerical value of the farthest right digit . . . 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.

Belgand commented on the BoingBoing site:

Part of it has to do with the way items are normally priced. Typically items are priced either at whole value (e.g. $200) or just barely below it. This causes you to view an item discounted to a smaller right-hand number to appear to have been discounted more through association whereas a higher digit in the right-hand position would seemingly indicate that the discount from the initial price was much lower.

So ultimately it seems to be more related to our past perceptions in making a quick judgment than a reasoned view of the actual deal on offer.

A person’s perception is their reality.

I find the advances in marketing psychology interesting.

Link: ScienceDaily (via BoingBoing)

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