Can sellers credibly signal their private information to reduce frictions in negotiations? Guided by a simple cheap-talk model, we posit that impatient sellers use round numbers to signal their willingness to cut prices in order to sell faster, and test its implications using millions of online bargaining interactions. Items listed at multiples of $100 receive offers that are 5% - 8% lower but that arrive 6 - 11 days sooner than listings at neighboring "precise" values, and are 3% - 5% more likely to sell. Similar patterns in real estate transactions suggest that round-number signaling plays a broader role in negotiations.

Loyalty programs offer rewards via mediums of different magnitudes (e.g., “$6 off when you accumulate 1,000 [100] points. Earn 10 [1] points/dollar”). The program medium presents two key pieces of information: reward distance (points required to redeem reward) and step size (points earned per dollar). In higher-magnitude (vs. lower-magnitude) programs, both reward distances (1,000 vs. 100) and step sizes (10 vs. 1 point[s]/dollar) are larger. How do these two pieces of information affect consumers' postenrollment inferences of progress, store loyalty, and recommendation likelihood? Do consumers always integrate both pieces? We identify a moderator, step-size ambiguity, and show that when ambiguity is high, only reward distance affects inferences. When ambiguity is lower, consumers integrate step size with reward distance, but in a biased manner. Implications arise in goal following and in physical and psychological distance estimation contexts (e.g., weight loss, savings) where distances and step sizes can vary (e.g., as a function of units: kilograms vs. pounds), but especially in loyalty rewards contexts.

This study investigated the frequency of different numerical responses in ratio estimation as a function of the numerical categories actually used by Ss. Analyses were conducted for three series of experiments involving magnitude and free-ratio estimation for the attributes of stimulus length, area, and distance. It was found that Ss use certain numerical categories (e.g., multiples of 1, 10, and 100) much more frequently than others (e.g., 37.5) and that the choice of category depends upon the order of magnitude of the response. The statistical implications for ratio scaling are not dramatic, but are worthy of notice.

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The constraints introduced in the analysis of individual behavior in economics were mainly two: income and time. Although we do sometimes find references to biological constraints like stomach capacity, this and other biological constraints' implications on market behavior were not investigated. The purpose of this paper is to show that taking into account the limited memory capacity of human beings sheds light both on specific features of literature and arts and on characteristics of advertising.

The authors develop a model of how consumers estimate the level of product inventory in their households. Two laboratory experiments and two field studies involving 29 product categories show that (1) consumers anchor their estimates on their average inventory and fail to adjust sufficiently; (2) adjustments follow an inelastic psychophysical power function, leading to overestimations of low levels of inventory and underestimations of high levels; and (3) adjustments are more elastic and, thus, more accurate when inventory is salient. Contrary to the assumptions of practitioners and academic modelers, these inventory estimates, not actual inventory levels, drive subsequent purchase incidence. Simulation results further show that biased estimates increase overstocking and spoilage among stockout-averse consumers but increase stockouts and unmet demand among overstocking-averse consumers. By predicting the magnitude, not just the direction, of estimation biases, the model and the results offer new insights into accelerating the consumption of healthy foods and improving the targeting of stockpiling-inducing sales promotions.

When evaluating the net impact of a series of percentage changes, we predict that consumers may employ a “whole number” computational strategy that yields a systematic error in their calculation. We report on three studies conducted to examine this issue. In the first study we identify the computational error and demonstrate its consequences. In a second study, we identify several theoretically driven boundary conditions for the observed phenomenon. Finally we demonstrate in a real‐world retail setting that, consistent with our premise, sequential percentage discounts generate more purchasers, sales, revenue, and profit than the economically equivalent single percentage discount.

ABSTRACT Nine experiments of timed odd-even judgments examined how parity and number magnitude are accessed from Arabic and verbal numerals. With Arabic numerals, Ss used the rightmost digit to access a store of semantic number knowledge. Verbal numerals went through an additional stage of transcoding to base 10. Magnitude information was automatically accessed from Arabic numerals. Large numbers preferentially elicited a rightward response, and small numbers a leftward response. The Spatial-Numerical Association of Response Codes (SNARC) effect depended only on relative number magnitude and was weaker or absent with letters or verbal numerals. Direction did not vary with handedness or hemispheric dominance but was linked to the direction of writing, as it faded or even reversed in right-to-left writing Iranian Ss. The results supported a modular architecture for number processing, with distinct but interconnected Arabic, verbal, and magnitude representations.

Do Ss compare multidigit numbers digit by digit (symbolic model) or do they compute the whole magnitude of the numbers before comparing them (holistic model) ? In 4 experiments of timed 2-digit number comparisons with a fixed standard, the findings of Hinrichs, Yurko, and Hu (1981) were extended with French Ss. Reaction times (RTs) decreased with target-standard distance, with discontinuities at the boundaries of the standard's decade appearing only with standards 55 and 66 but not with 65. The data are compatible with the holistic model. A symbolic interference model that posits the simultaneous comparison of decades and units can also account for the results. To separate the 2 models, the decades and units digits of target numbers were presented asynchronously in Experiment 4. Contrary to the prediction of the interference model, presenting the units before the decades did not change the influence of units on RTs. and cons of the holistic model are discussed.

The present study examined the immediate and delayed effects of unobtrusive exposure to personality trait terms (e.g., “reckless”, “persistent”) on subjects' subsequent judgments and recollection of information about another person. Before reading a description of a stimulus person, subjects were unobtrusively exposed to either positive or negative trait terms that either could or could not be used to characterize this person. When the trait terms were applicable to the description of the stimulus person, subjects' characterizations and evaluations of the person reflected the denotative and evaluative aspects of the trait categories activated by the prior exposure to these terms. However, the absence of any effects for nonapplicable trait terms suggested that exposure to trait terms with positive or negative associations was not in itself sufficient to determine attributions and evaluations. Prior verbal exposure had little effect on reproduction of the descriptions. Moreover, no reliable difference in either evaluation or reproduction was found between subjects who overtly characterized the stimulus person and those who did not. Exposure to applicable trait terms had a greater delayed than immediate effect on subjects' evaluations of the stimulus person, suggesting that subjects may have discounted their categorizations of the stimulus person when making their immediate evaluations. The implications of individual and situational variation in the accessibility of different categories for judgments of self and others are considered.

How do we use place information in a number comparison task involving multidigit numbers? In four experiments, subjects identified stimulus numbers as larger or smaller than the number 5,000 in a choice reaction time task. As the difference between the number of places in the stimulus number and the number of places in the standard decreased, response time and errors significantly increased. When the number of places was held constant, the type of numeric information extracted depended on the value of the standard (5,000 or 5,555). In some cases, irrelevant place information affected choice time.

Abstract Results of 2 experiments with 137 undergraduates suggest that 2-digit numbers are compared as integrated quantities with comparison time decreasing as a logarithmic function of the absolute difference between the 2 numbers. A place-value effect occurred only when the presented number was in the same decade as the standard. In that case, the comparison process appeared to shift to an evaluation of the ones-place digit. (13 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)

Long lists of ranked items, such asBloomberg Businessweek rankings of MBA programs, are ubiquitous in Western culture, and they are often used in consumer decision making. Six studies show that consumers mentally subdivide ranked lists into a smaller set of categories and exaggerate differences between consecutive items adjacent to category boundaries. Further, despite prior work suggesting that people might subjectively produce place-value categories (e.g., single digits, the twenties), this research shows that consumers interpret ranked lists by generating round-number categories ending in zero or five (e.g., top 10, top 25). Thus, for example, consumers will more favorably evaluate improvements in rank that cross round-number-category boundaries (e.g., shifting from rank 11 to rank 10) than improvements in rank that cross place-value-category boundaries (e.g., shifting from rank 10 to rank 9). This phenomenon, labeled thetop-ten effect, occurs because round numbers are cognitively accessible to consumers due to their prevalent use in everyday communication.

KAUFMAN EL, LORD MW.

Consumers often like fluently processed stimuli. The authors find that one source of fluency for numerical stimuli is the generation of a number through common addition (e.g., 1 + 1 through 10 + 10) and common multiplication (2 01— 2 through 10 01— 10) problems (study 1). Common addition and multiplication problems (arithmetic), or their operands, can be used to prime a number and increase its fluency (study 3). The benefits of arithmetic and operand primes are limited to single primes (i.e., more primes are not necessarily better) (study 5). Number fluency is relevant to creating numeric brand names (study 2), enhancing the liking of numeric brand names through advertising (study 4), and executing price promotions (study 6).

The literature overwhelmingly demonstrates that feelings of ease are good and that objects that are easy to process are much liked. We propose, and demonstrate across three experiments, that this is not the case when people are pursuing a goal. This is because people pursuing a goal (e.g., 鈥渂ecome kinder鈥 usually invest efforts in whichever means (e.g., donate to a particular charity) they perceive as most instrumental for attaining their goal. Consequently, in their minds there is a correspondence between instrumentality of a means and feelings of effort. This correspondence becomes reversed in people's minds during goal pursuit, and they also come to view an object that is associated with feelings of effort rather than ease as more instrumental for goal attainment and consequently more desirable. When an object is not a means to fulfill an accessible goal, or when goals relating to the means are not accessible, subjective feelings of ease improve evaluation, as found in previous research on ease of processing.

Despite the importance of odd price endings in retailing, there have been extremely few published studies of the psychological effect of odd prices on consumers. The literature lacks conclusive evidence to show whether or not odd prices are perceived to be lower in dollar-and-cents terms than even prices. The study reported in this article measured monetary perceptions of odd and even prices, followed by a comparative analysis. The results suggested lower price illusions were associated with odd prices under some but not all circumstances.

Across a series of three studies, we demonstrate that the number of product units displayed on a package biases consumers' perceptions of product quantity (i.e., the number of snack items the package contains) and actual consumption. Specifically, we demonstrate that consumers use an anchoring heuristic to infer that packages that display a greater number of product units (e.g., 15 pretzels vs. 3 pretzels) have a higher product quantity inside. Importantly, we demonstrate that actual consumption of the food product follows this anchor judgment. The studies demonstrate that these effects are moderated by level of visual processing and that they are robust even in the presence of verbal information.

Quantitative changes may be conveyed to consumers using small units (e.g., change in delivery time from 7 to 21 days) or large units (1–3 weeks). Numerosity research suggests that changes are magnified by small (vs. large) units because a change from 7 to 21 (vs. 1–3) seems larger. We introduce a reverse effect that we term unitosity: changes are magnified by large (vs. small) units because a change of weeks (vs. days) seems larger. We show that numerosity reverses to unitosity when relative salience shifts from numbers to units (study 1). Then, arguing that numbers (units) represent a low-level (high-level) construal of quantities, we show this reversal when mind-set shifts from concrete to abstract (studies 2–4). These results emerge for several quantities—height of buildings, time of maturity of financial instruments, weight of nutrients, and length of tables—and have significant implications for theory and practice.

A traditional assumption concerning how prices influence buyers purchasing behaviors has been that buyers know the prices of the products and services that they consider for purchase. However, empirical research during the past four decades repeatedly has discovered that buyers often are not able to remember the prices of items they had recently purchased. One conclusion that has been drawn is that buyers often do not attend to price information in purchase decisions. The authors argue that this conclusion may be incorrect in that what consumers can explicitly remember is not always a good indicator of what they implicitly know. Price information not consciously remembered can still influence internal reference prices and product evaluations. In this article, the authors discuss the conceptual and methodological ramifications of the distinction between remembering and knowing to reassess and refine our understanding of how buyers process and use price information.

What are the drivers of retailer pricing tactics over time? Based on multivariate time-series analysis of two rich data sets, we quantify the relative importance of competitive retailer prices, pricing history, brand demand, wholesale prices, and retailer category-management considerations as drivers of retail prices. Interestingly, competitive retailer prices account for less than 10% of the over-time variation in retail prices. Instead, pricing history, wholesale price, and brand demand are the main drivers of retail-price variation over time. Moreover, the influence of these price drivers on retailer pricing tactics is linked to retailer category margin. We find that demand-based pricing and category-management considerations are associated with higher retailer margins. In contrast, dependence on pricing history and pricing based on store traffic considerations imply lower retailer margins.

People are especially sensitive to numerosity as a cue for judging quantity or probability. That is, people sometimes judge amount or likelihood on the basis of the number of units into which a stimulus is divided without fully considering other important variables (e.g., the size of the units). People appear to be especially likely to make use of this numerosity heuristic when their cognitive resources are taxed. Consistent with this idea, five experiments showed that people are especially likely to overinfer quantity or probability from numerosity (a) when they are asked to make inherently difficult judgments, (b) when they are asked to render judgments while performing a concurrent task, and (c) when they are forced to make especially rapid judgments

Given the number of volume judgments made by consumers, for example, deciding which package is larger and by how much, it is surprising that little research pertaining to volume perceptions has been done in marketing. In this article, the authors examine the interplay of expectations based on perceptual inputs versus experiences based on sensory input in the context of volume perceptions. Specifically, they examine biases in the perception of volume due to container shape. The height of the container emerges as a vital dimension that consumers appear to use as a simplifying visual heuristic to make a volume judgment. However, perceived consumption, contrary to perceived volume, is related inversely to height. This lowered perceived consumption is hypothesized and shown to increase actual consumption. A series of seven laboratory experiments programmatically test model predictions. Results show that perceived volume, perceived consumption, and actual consumption are related sequentially. Furthermore, the authors show that container shape affects preference, choice, and postconsumption satisfaction. The authors discuss theoretical implications for contrast effects when expectancies are disconfirmed, specifically as they relate to biases in visual information processing, and provide managerial implications of the results for package design, communication, and pricing.

Analysis of the rightmost digits of selling prices in a sample of retail price advertisements confirmed past findings indicating the overrepresentation of the digits 0, 5, and 9. The high cognitive accessibility of round numbers can account for the overrepresentation of 0‐ and 5‐ending prices and suggests the existence of two effects that could account for the overrepresentation of 9‐ending prices: (1) a tendency of consumers to perceive a 9‐ending price as a round‐number price with a small amount given back and (2) a tendency of consumers to underestimate a 9‐ending price by encoding it as the first round number evoked during incomplete left‐to‐right processing. Analysis of the patterns of rightmost digits observed in the sample provides supportive evidence particularly for the second of these two 9‐ending effects.

Abstract This paper compares sharp versus round numbers in advertising claims. Round numbers have a salient conceptual basis (e.g., 10 years are a decade). Sharp numbers do not (e.g., 11 years). Estimates tend to be expressed with round numbers. An experiment is described that examines whether consumers make the false assumption that claims using sharp numbers are less likely to be estimates (i.e., are more factual) than those using round numbers and, if so, whether this makes sharp-number claims more believable. The results demonstrate that such assumptions do occur, even for those consumers considered to be advertising skeptics.

Human reasoning is accompanied by metacognitive experiences, most notably the ease or difficulty of recall and thought generation and the fluency with which new information can be processed. These experiences are informative in their own right. They can serve as a basis of judgment in addition to, or at the expense of, declarative information and can qualify the conclusions drawn from recalled content. What exactly people conclude from a given metacognitive experience depends on the naive theory of mental processes they bring to bear, rendering the outcomes highly variable. The obtained judgments cannot be predicted on the basis of accessible declarative information alone; we cannot understand human judgment without taking into account the interplay of declarative and experiential information.

Several consumer behavior theories have been offered to explain the preponderance of prices that end in the digit 9. This study attempts to incorporate these proposed behaviors into the implicit utility function of consumer choice models, resulting in both a more accurate tool for managerial decision making and additional insights into how consumers actually behave toward price endings. An attempt is made to compensate for both level effects (those effects in which consumers may underestimate the value of a price) and image effects (those effects in which consumers may infer meaning from the right and digits). The models are estimated using scanner panel data for two frequently purchased products, tuna and yogurt. The results support the importance of accounting for the digits in consumer choice models, providing evidence for both image effects and level effects.

We examine two questions: Does the roundness or precision of prices bias magnitude judgments? If so, do these biased judgments affect buyer behavior? Results from five studies suggest that buyers underestimate the magnitudes of precise prices. We term this the precision effect. The first three studies are laboratory experiments designed to test the existence of the precision effect and examine the underlying psychological processes. In Study 1, we find that precise prices are judged to be smaller than round prices of similar magnitudes. For example, participants in this experiment incorrectly judged $395,425 to be smaller than $395,000. In Study 2, we show that precision is more likely to affect magnitude judgments under conditions of uncertainty. Study 3 demonstrates that manipulating prior experience with the pattern of roundness and precision in numbers can moderate the precision effect. Studies 4 and 5 examine whether the precision effect influences buyers' willingness to pay for negotiated purchases (e.g., houses). In Study 4, we conduct an experiment on a nationally representative sample of homeowners to demonstrate that participants are willing to pay more for houses when the sellers use precise (e.g., $364,578) instead of comparable round (e.g., $365,000) prices. In Study 5, we analyze data from residential real estate transactions in two separate markets and find that buyers pay higher sale prices when list prices are more precise. These empirical results enrich our understanding of the psychological processes that underlie price magnitude judgments and have substantive implications for buyer and seller behavior.

People are capable of thinking about the future, the past, remote locations, another person's perspective, and counterfactual alternatives. Without denying the uniqueness of each process, it is proposed that they constitute different forms of traversing psychological distance. Psychological distance is egocentric: Its reference point is the self in the here and now, and the different ways in which an object might be removed from that point-in time, in space, in social distance, and in hypotheticality-constitute different distance dimensions. Transcending the self in the here and now entails mental construal, and the farther removed an object is from direct experience, the higher (more abstract) the level of construal of that object. Supporting this analysis, research shows (a) that the various distances are cognitively related to each other, (b) that they similarly influence and are influenced by level of mental construal, and (c) that they similarly affect prediction, preference, and action.

How do consumers decide how many units to buy? Whereas prior research on individual consumers' purchases has focused primarily on purchase incidence and brand choice, the authors focus on the psychological process behind the purchase quantity decision. The authors propose that a simple anchoring and adjustment model describes how consumers make purchase quantity decisions and suggests how point-of-purchase promotions can increase sales. Two field experiments and two lab studies show that anchor-based promotions-presented as multiple-unit prices, purchase quantity limits, and suggestive selling-can increase purchase quantities. The final study shows that consumers who retrieve internal anchors can counter these anchor-based promotions effectively. Firms might receive net benefits from anchor-based promotions depending on whether increases in unit sales reflect increased category consumption, brand switching, variety switching, store switching, or stockpiling.

Abstract Do numbers have gender? Wilkie and Bodenhausen (2012) examined this issue in a series of experiments on perceived gender. They examined the perceived gender of baby faces and foreign names. Arbitrary numbers presented with these faces and names influenced their perceived gender. Specifically, odd numbers connoted masculinity, while even numbers connoted femininity. In two new studies (total N = 315), we further examined the gendering of numbers. The first study examined explicit ratings of 1-digit numbers. We confirmed that odd numbers seemed masculine while even numbers seemed feminine. Although both men and women showed this pattern, it was more pronounced among women. We also examined whether this pattern holds for automatic as well as deliberated reactions. Results of an Implicit Association Test showed that it did, but only among the women. The implicit and explicit patterns of numerical gender ascription were moderately correlated. The second study examined explicit perceptions of 2-digit numbers. Again, women viewed odd numbers as more masculine and less feminine than even numbers. However, men viewed 2-digit numbers as relatively masculine, regardless of whether they were even or odd. These results indicate that women and men impute gender to numbers in different ways and to different extents. We discuss possible implications for understanding how people relate to and are influenced by numbers in a variety of real-life contexts.

Marketing communications often contain numerical information that can be expressed more or less precisely. Earlier research has identified a number of ways in which consumers respond differently to precise versus round numbers. The current research attempts to enrich this literature by introducing a new theoretical perspective. Drawing on recent findings in the numerical cognition literature, this work proposes that individuals project gendered meanings to precise versus round numbers, with precise numbers seen as more masculine relative to round ones. Seven studies provided convergent evidence for this proposition and demonstrated its marketing implications. Studies 1, 2, and 3, employing various approaches, show that participants do subscribe to this precision-masculinity intuition, at both implicit and explicit levels. Study 4 suppresses this effect by priming participants with examples where precision is connected to femininity. Building on these findings, subsequent studies demonstrate that marketing communications using precise (round) numbers lead to more favorable evaluations when the products or attributes are positioned as masculine (feminine).

Seven basic premises for improving traditional quantitative and qualitative advertising research techniques are proposed. It is proposed that most communication is nonverbal, thoughts occur as images, metaphors are vital components of thought, the senses generate important metaphors , consumer behavior and knowledge are embodied in mental models, deep structures of thought can be brought to the surface, and emotion and reason co-mingle. Aside from these premises, the Zaltman Metaphor Elicitation Technique (ZMET) is also introduced. ZMET is an approach for understanding consumers' mental models that influence their thinking and behavior relating to such issues as brands, products, product usage, brand equity, and purchase designs and concepts. This technique has been proven to generate results consistent with the outcomes of other advertising research methods, as well as deeper insights not provided by traditional methods.