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A growing body of research suggests that the timeless trick of charging, say, $3.99 rather than $4.00 may actually work.
In one study, researchers offered people a choice between two different pens.
When the pens were priced at at $2.00 and $3.99, nearly half of the people chose the more expensive pen.
But when the prices changed by a single penny, to $1.99 and $4.00, fewer than 20 percent of people chose the more expensive pen.
Social scientists call this the "left-digit bias" — peoples' tendency to place too much weight on the leftmost digit of a number.
http://www.npr.org/blogs/money/2011/06/01/136851451/this-blog-post-costs-3-99?sc=nl&cc=pmb-20110601
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It's silly when you think about it that $9.99 sounds so much better a deal than ten bucks but it does! I'm a sucker for that. :)
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I'm even worse if it's into triple figures. "$100! Too expensive. " Half an hour later in another store "That's only $99.99 in this store. Let's get it here!" LOL.
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They found that the price of a car drops significantly when the mileage crosses multiples of 10,000.
For example, cars with 80,000 miles sell for about $210 less, on average, than cars with 79,900 miles.
By comparison, cars with 79,900 miles sell for about $10 less, on average, than cars with 79,800 miles.
That's interesting because when we look for cars we look for ones until a certain mileage in the tens of thousands too. Next time I'll be searching it in the x,900 miles rather than x,000. That should save me some money!
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I always round it up in my mind too like Kay plus add on the tax. If anything I tend to overestimate more than underestimate it to allow a margin of error in my mental arithmetic. I don't think the last number influences me at all.
And the rest were like me and cried "how much for a pen?" :D I've never heard of left digit bias. In fact I thought this was going to be about fingers when I saw the title LOL. I don't think I do this because I always round up in my head.
The best way for a person to have happy thoughts is to count his blessings and not his cash. ~Author Unknown