Abstract
Through two experiments, we examined the consumers’ process of comparison of regular and sale price information in advertisements. This is an extension of studies of the left-digit effect with different price levels and multiple digits conducted using Taiwanese data. First, we find that in a comparison of regular and sale prices, specifically three-digit integers with different leftmost digits, consumers perceive the price discount to be larger when the left digit is small (e.g., 1 or 4) than when it is large (e.g., 7). The lower the two prices being compared, the more likely it is that the left-digit effect will exist. Second, the perceived discount is likely to diminish when the number of digits is increased to produce a four-digit integer. In other words, the number of digits can affect perceptions of the numerical difference when comparing two prices. Thus, the effect of a left-digit change to produce a nine-ending price would be weaker for higher-priced products. The findings indicate the existence of a novel boundary to the left-digit effect.
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The authors would like to thank the editor and reviewer for their very helpful comments and suggestions and also thank Ms. Debbie Nester for helping to make the article more readable.
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An erratum to this article is available at http://dx.doi.org/10.1007/s11002-016-9403-4.
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Lin, CH., Wang, JW. Distortion of price discount perceptions through the left-digit effect. Mark Lett 28, 99–112 (2017). https://doi.org/10.1007/s11002-015-9387-5
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DOI: https://doi.org/10.1007/s11002-015-9387-5