Tuesday, August 26, 2014

This Number Just Feels Right: The Impact of Roundedness of Price Numbers on Product Evaluations

WADHWA Monica, ZHANG Kuangjie
Access the publisher's website Journal of Consumer Research (forthcoming)

This research proposes that since rounded numbers are more fluently processed, rounded prices (e.g., $200.00) encourage reliance on feelings. In contrast, since non-rounded numbers are disfluently processed, non-rounded prices (e.g., $198.76) encourage reliance on cognition. Thus, rounded (non-rounded) prices lead to a subjective experience of “feeling right” when the purchase decision is driven by feelings (cognition). Further, this sense of feeling right resulting from the fit between the roundedness of the price number and the nature of decision context can make positive reactions toward the target product more positive and negative reactions more negative, a phenomenon referred to as the rounded price effect in the current research. Results from five studies provide converging evidence for the rounded price effect. Findings from the current research further shows that merely priming participants with rounded (non-rounded) numbers in an unrelated context could also lead to the rounded price effect. Finally, this research provides process support by showing that the rounded price effect is mediated by a sense of feeling right. This is the first research examining the differential impact of roundedness of prices on product purchase decisions, based on whether the purchase decision is driven by feelings versus cognition.