Psychological price perception may exert a weaker effect on purchasing decisions than previously suggested: Results from a large online experiment fail to reproduce either a left-digit or perceptual-fluency effect

Retail store prices are frequently set to either a just-below (e.g., $1.99) or rounded to (e.g., $2.00) integer levels. Previous studies proposed two price-perception effects that may underly such psychological pricing strategies. First, the left-digit effect (LDE) assumes consumers read prices left-to-right. Cognitive limitations let consumers overweight the impact of digits on the left side of the price while underweighting digits on the right side of the price. This effect appears to conflict with the contradictory perceptual fluency effect (PFE), which proposes that a rounded price is more perceptual fluent and, thus, more attractive to consumers. To address these paradoxical effects, we conducted an online experiment with 266 participants making a total of 4788 purchasing decisions where we systematically varied the purchasing prices of otherwise identical lottery tickets across two price levels. Against expectations, we found no support for either of the two price-perception effects. We propose three possible explanations of these null results.