Do Consumers Perceive Precise Prices to Be Lower Than Round Prices? Evidence From Laboratory and Market Data

Does roundness of prices bias magnitude judgments? If so, do these biased judgments affect buyer behavior? Building on evidence of greater prevalence of precision in smaller than in larger numbers (Dehaene and Mehler 1992), we suggest that people use precision as a heuristic cue for smaller magnitudes. We term this the “precision heuristic” in price magnitude judgments. Across four studies, we find that precision or roundness of prices influence participants’ judgments of the magnitude of a price. For example, participants in our experiments incorrectly judged $395,425 to be smaller than $395,000. We also analyze data from more than 27,000 residential real estate transactions in two separate markets and find that buyers pay higher sale prices when list prices are more precise.


Manoj Thomas, Daniel Simon, and Vrinda Kadiyali (2009) ,"Do Consumers Perceive Precise Prices to Be Lower Than Round Prices? Evidence From Laboratory and Market Data", in NA - Advances in Consumer Research Volume 36, eds. Ann L. McGill and Sharon Shavitt, Duluth, MN : Association for Consumer Research, Pages: 184-187.


Manoj Thomas, Cornell University, USA
Daniel Simon, Cornell University, USA
Vrinda Kadiyali, Cornell University, USA


NA - Advances in Consumer Research Volume 36 | 2009

Share Proceeding

Featured papers

See More


“I Desire A Brand When I See How They are Different from Me”: Differential Effects of Blatant and Subtle Brand Rejection

Jun Yan, University of Manitoba, Canada
Fang Wan, University of Manitoba, Canada
Americus Reed, University of Pennsylvania, USA

Read More


Making the Wait Worthwhile: Mental Accounting and the Effect of Waiting in Line on Consumption

Chris Hydock, Georgetown University, USA
Sezer Ulku, Georgetown University, USA
Shiliang Cui, Georgetown University, USA

Read More


I3. Hormonal Effects on Materialism and the Moderating Role of Intrasexual Competition

Marcelo Vinhal Nepomuceno, HEC Montreal, Canada
Cristina Maria de Aguiar Pastore, Pontifical Catholic University of Paraná - PUCPR
Eric Stenstrom, Miami University, Ohio

Read More

Engage with Us

Becoming an Association for Consumer Research member is simple. Membership in ACR is relatively inexpensive, but brings significant benefits to its members.