The item below discusses a common trick used to profit from consumers’ irrational behaviour. The key ethical question: is it ethically OK to rely on what is, in effect, a pervasive weakness of consumers’ minds. Our tendency to be excessively influenced by the left-most digit of a product’s price, and in particular our irrational love of prices that end in “.99”, is a regrettable but common flaw in our mental capacities. In other situations, it’s considered unethical for sellers to prey upon buyers’ vulnerability. It’s considered unethical, for example, to prey upon the fears of the elderly by selling them insurance products they don’t need. And marketing to children has long been considered ethically difficult terrain, because young children’s grasp of reality is not fully formed. Is the present case any different, just because it applies to literally all of us?
LINK: The real reason most prices end in 99 cents (by from the CBC radio show Under the Influence)
Over 60 per cent of prices end in the number 9. And the reason behind this odd phenomenon is more complex than you may think.
It’s called the “left digit effect.”
That quirk we collectively share of looking at a price like $19.99 and seeing it as $19, instead of a penny shy of 20.
We judge prices by the left digit.
This method of not pricing items in round numbers is also called “Odd Pricing” — referring to the resulting odd price numbers like 69 or 99 cents….
What do you think?