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Marketing Letters

, Volume 29, Issue 2, pp 261–273 | Cite as

Penny wise and pound foolish? How thinking style affects price cognition

  • Lingjiang Lora Tu
  • Chris Pullig
Article

Abstract

Nine-ending pricing is a common marketing technique because of the traditional belief that consumers pay more attention to the dollar digits and less attention to the penny digits. This research challenges the universal effectiveness of nine-ending pricing and identifies thinking style as a moderator for the nine-ending price effect with analytic (holistic) thinkers more (less) prone to the effect of nine-ending prices. Further, we examine cognitive resource as a boundary condition for the moderating effect. Our results demonstrate that holistic thinkers are not responsive to nine-ending prices when they have unlimited cognitive resources. With limited cognitive resources (e.g., under time pressure or cognitive load), both holistic and analytic thinkers are subject to the nine-ending price effect. We identify the lack of holistic thinking as a mechanism underlying the nine-ending effect.

Keywords

Nine-ending prices Thinking style Analytic thinking Holistic thinking Price cognition 

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Marketing Department, Hankamer School of BusinessBaylor UniversityWacoUSA

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