i An Analysis of Nine-ending Pricing

Prices ending in 9 are ubiquitous. In this paper I first develop a theoretical model of the effect of such prices on sales and review the empirical literature on the topic. Then I use a data set from an online experiment run by Lau (2000) to conduct an empirical study of the effect. Analysis with a logit model indicates that products with 9-ending prices are more likely to be chosen than others but a high fraction of 9-endings decreases the effect