Why Do Prices End in .99?

Look at almost any price tag and the last digit is a nine. At one Chicago supermarket chain, about two out of three prices ended in 9, when chance would give one in ten. Nobody knows for sure who started it, and the famous cash-register theft story is unproven. But research shows what that one cent does: your brain files $2.99 under two dollars, and a nine at the end can read like a sale sign. Then there's the twist: at one big grocery chain, the nines weren't cheaper at all. 00:00 Why everything ends in 9 00:45 Who started it? (The theft story) 02:00 The left-digit effect 02:42 22 million used cars 03:25 The dress that sold more at $39 04:32 The store that quit the nines 05:24 The twist 06:17 Read it from the right Sources • Daniel Levy, Dongwon Lee, Haipeng Chen, Robert Kauffman and Mark Bergen, "Price Points and Price Rigidity", Review of Economics and Statistics 93(4), 2011 (working paper, MPRA 1472): https://mpra.ub.uni-muenchen.de/1472/ • James and John Ritty, U.S. Patent 221,360, "Cash Register and Indicator" (1879): https://patents.google.com/patent/US2... • Cecil Adams, "Why do prices end in .99?", The Straight Dope: https://www.straightdope.com/21341889... • Manoj Thomas and Vicki Morwitz, "Penny Wise and Pound Foolish: The Left-Digit Effect in Price Cognition", Journal of Consumer Research 32(1), 2005: https://doi.org/10.1086/429600 • Nicola Lacetera, Devin G. Pope and Justin R. Sydnor, "Heuristic Thinking and Limited Attention in the Car Market", American Economic Review 102(5), 2012: https://doi.org/10.1257/aer.102.5.2206 • Eric Anderson and Duncan Simester, "Mind Your Pricing Cues", Harvard Business Review, September 2003: https://hbr.org/2003/09/mind-your-pri... • Eric Anderson and Duncan Simester, "Effects of $9 Price Endings on Retail Sales: Evidence from Field Experiments", Quantitative Marketing and Economics 1, 2003: https://doi.org/10.1023/A:1023581927405 • "Yours for Only $19.99", Chicago Booth Review, 1999: https://www.chicagobooth.edu/review/y... • Brad Tuttle, "Why JCPenney's 'Fair and Square' Prices Are No Fun", TIME, 29 March 2012 • J.C. Penney Company, Form 10-Q for the quarter ended 28 April 2012 (SEC EDGAR); Form 8-K, 8 April 2013 • Anne Fenneman et al., "Psychological price perception may exert a weaker effect on purchasing decisions than previously suggested", PLOS ONE, 2022: https://pubmed.ncbi.nlm.nih.gov/35980... • Avichai Snir and Daniel Levy, "If You Think 9-Ending Prices Are Low, Think Again", Journal of the Association for Consumer Research 6(1), 2021 Illustrations are original drawings and stylized reconstructions; the people shown are generic, not likenesses. No company logos are used. Narration uses a synthetic voice. Spot an error? Tell us in the comments. Corrections get pinned.