Pricing Psychology


I am looking for a reference on this topic. Every knows that the difference in cost between $100 and $99 is more than $1 in the minds of consumers. Thus prices ending in $99 are commonplace but obvious and somehow make the seller appear disingenuous.

Are there any other digit combinations that have relatively lower perceived cost?

For example, $187 seems not much more than $180. Is a price ending in 87 good for the vendor?

Ideally I'd like to find a chart with, say, 100 to 200 on horizontal axis and the actual perceived cost on the vertical. It would not be a straight line with, e.g. with a step up at 200. A chart like this would help fine-tune product pricing.

Pricing Psychology

asked Feb 2 '12 at 10:47
394 points

3 Answers


Coming from UX corner, I may have some interesting links for you towards price and decision making. Its actually more targeting marketing, like how to sell stuff, but nevertheless giving you some research insights (and links to docs) of how price tags affect decision.

Pricing Experiments Impact of Number Formats Power of Comparision Anchoring, Ordering, Framing

answered Feb 7 '12 at 01:49
Frank L
266 points
  • Boy, still reading, this is a great collection of articles! – Herr K 11 years ago


There is a technique called anchoring which is explained well in Dan Ariely's book Predictably Irrational, along with other value perception quirks. There are studies mentioned in the book as well.

answered Feb 2 '12 at 15:01
31 points


I think what you want to do is start with this article and then use the laws and papers it references to do further research. it does mention the Benford's Law, Price Points and other methods of pricing your products to psychologically entice the consumers.

answered Feb 2 '12 at 14:47
1,779 points

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