Talk:Psychological pricing

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The methodology of the Wisniewski and Blattberg study has been challenged. The non-linear nature of the demand curve is not in and of itself evidence of psychological pricing. The evidence they found can be explained with a smooth curve. If psychological pricing is true, you will find sharp discontinuities in the curve. Rossami

I agree with you that "The non-linear nature of the demand curve is not in and of itself evidence of psychological pricing." There are at least two other potential causes of price points. In fact, that is one of the reasons why there is so much room for controvercy: One researcher looks at the data and says this is due to odd number pricing, while another interprets it as resulting from the pricing of close substitutes.
I do not agree however that the research is consistant with a linear demand curve. If the research indicates significant changes in the quantity demanded at certain prices, this must be reflected in the shape of the demand curve.
(I meant non-linear as in "no discontinuities", not that the curve was a straight line. Sorry for the confusion. Interesting point below. I'll have to relook the data. Rossami)
As for your claim that "If psychological pricing is true, you will find sharp discontinuities in the curve.", I look at that as a sample size issue. The more respondants in the survey (or purchase lab experiment), the greater the number of data points, and the more continuous the curve. If you are constructing a demand curve for a single individual, there would be discontinuities, but as you add more respondents to the curve, the gaps would fill in. Because of this, the demand curve is drawn as continuous even though the researcher may not have obtained a data point for every value within the range of the graph. mydogategodshat 10:49, 9 May 2004 (UTC)

[edit] removed section

I've removed the paragraph below. I was attempting to clean up the grammar of the section but ultimately decided that I could not figure out what the original author meant. The paragraph as written is self-contradictory. I've moved it here in case someone else can fix it. Rossami (talk) 19:52, 9 August 2006 (UTC)

Given that the parity of wholesale prices is evenly distributed, it is unnatural that sale prices end more frequently in odd numbers. In modern times, this is due largely to the fact that psychological pricing produces numbers ending in nine.

The author was apparently distinguishing between wholesale prices and sale prices (i.e. selling to retailers and selling to consumers). He was saying that it might seem odd that the prices are different in that way, but that it makes sense when psychological pricing is taken into account. Tom Stringham 20:19, 15 August 2006 (UTC)

[edit] Search-terms pricing policy

It is easy to see on some sites (for example Autotrader.co.uk) that products are listed at .99 or .95 prices in order to be 'higher up' the low-high price search for products. As a result I have noticed a creeping move (online only) to price things are increasingly unusual prices such as £1,989 or £1,985. This way the person is sacrificing £10/15 to be in the first few pages of the search terms for cars in that price region. Is this worth trying to find a referenced source to add this in or is it so trivial it isn't worth the effort? ny156uk 15:43, 3 December 2006 (UTC)

I've been seeing the same thing and have wondered if the trend is real or just sampling bias among my own observations. If you can find a published study on this trend (whether the hypothesis was confirmed or rejected), I think that would be an excellent addition to the encyclopedia. I'm not sure if it would strictly fall under "psychological" pricing but it would definitely belong in one of our pricing articles. Rossami (talk) 01:01, 5 December 2006 (UTC)

[edit] tagged for cleanup

Although the article badly needs references, even that is no big deal given the topic. That can be dealt with. But at very least, conclusory phrases such as "Now that consumers|consumers are used to ..." should be taken out entirely. dr.ef.tymac 15:04, 8 July 2007 (UTC)