Roger Dooley's post offers more insight into the ever expanding psychology of pricing.
“So, it seems, I might have done as well selling a $499 product at $502.50 - they key thing is to avoid the dreaded round number of $500, which implies a lack of precision in pricing.
I still think there might be a slight bias toward the slightly lower number than the slightly higher number when it comes to buyer decision-making, but the researchers didn’t explore that directly.
This work should give marketers the ammunition they need to fend off requests for “simplified” pricing, though. In pre-neuromarketing days, I recall frequent admonitions that, “Nobody is fooled by a price that’s a penny cheaper - let’s keep it simple and just charge an even number.” People may not be “fooled” by the more precise price, but they may impute a higher value to the product itself.”
Pricing is an imperfect science, the perception of higher value based on a higher price is very strong.
