"Your brain processes prices from left to right The first thing to understand about charm pricing is that it exploits how our brains actually read numbers. When you see $19.99, your brain doesn't process it as a complete unit. Instead, it reads from left to right, and that first digit anchors your perception before you even finish reading the price."
"Researchers call this the "left-digit bias," and it's surprisingly powerful. A study from the National Bureau of Economic Research on used car pricing found significant price drops at mileage thresholds where the leftmost digit changes. Cars with 79,900-79,999 miles sold for approximately $210 more than cars with 80,000-80,100 miles, demonstrating how powerfully that first digit influences our perception of value."
Charm pricing is widespread, with many transactions ending in .99, .95, or .97. The tactic leverages how the brain reads numbers from left to right, causing the leftmost digit to anchor perception. The left-digit bias leads observers to register $19.99 as meaningfully less than $20. Research from the National Bureau of Economic Research shows price drops at mileage thresholds where the leftmost digit shifts; cars with 79,900–79,999 miles sold for about $210 more than those with 80,000–80,100 miles. Mental heuristics speed decision-making, and retailers use those shortcuts to influence perceived value. Pricing experiments test small differences across near-identical price points.
Read at Silicon Canals
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