dc.description.abstract | The left-digit effect describes what happens when product prices are presented in a certain way, for example at one cent below a whole number. The influence exerted means that prices are encoded at significantly different levels when the leftmost digit is changed to a lower level (e.g., $3.00 and $2.99), but this is not the case if the leftmost digit remains unchanged (e.g., $3.20 to $3.19). It has been shown that the leftmost digits can exert a disproportionate influence on the encoding of the perceived magnitude of a price when the leftmost digits differ and when the two prices being compared are closer (e.g., $3.99 vs. $5.00 compared to $3.99 vs. $6.00).
The left-digit effect has been shown to have a big impact on the perceived numerical difference. However, in prior research relatively little was known about the possible impact of moderating variables on the left-digit effect. In this dissertation, an analog model adapted from the numerical cognition literature (Adaval and Monroe 2002; Monroe and Lee 1999) is used to explore how the left-digit effect and perceived numerical difference may be influenced by physical and psychological factors, and a much wider price level. Eight experiments are carried out to assess the conditions under which the left-digit effect occurs or weakens with the goal at providing a deeper understanding of the processing mechanisms that underlie this form of perceptual distortion. Further, it is hoped that this endeavor will contribute to our understanding of the boundaries to the left-digit effect.
The results of study 1 show that a nine ending price affects the perceived difference between two compared prices only if the leftmost digit changes, as in Thomas and Morwitz (2005). In study 2, the empirical study of the left-digit effect to is extended to non-nine ending numbers. Similarly, three digit numbers ending in 7 (e.g., 297 vs. 300) can also be underestimated in the same way as numbers ending in 9 (e.g., 299 vs. 300).
Study 3 to study 6 seek to explore the effect of price font size, distance between digits, and orientation (horizontal vs. vertical) on the relationship of left digit and perceived difference between two compared prices. The results indicate that the left-digit effect does not occur when the font size of the target price is magnified, the distance between the price digits is increased or the prices are displayed using a vertical model. In short, price font size, the way the price is displayed, and physical separation between the digits can affect numerical difference perceptions when comparing two prices.
In studies 6 and 7 are designed to explore how the left-digit effect and perceived numerical difference may be influenced by both the digit size and the number of digits. In study 6, a comparison of regular and sale prices, specifically three digit integers with different leftmost digits, shows that consumers perceive the price discount to be larger when the left digit is small (e.g., 1 or 4) than when it is large (e.g., 7). The lower the two prices being compared, the more likely it is that the left-digit effect will occur. The results of study 7 show that the perceived discount is likely to diminish when the number of digits is increased to produce a four digit integer. In other words, the number of digits can affect perceptions of the numerical difference when comparing two prices. Thus, the effect of a left-digit change to produce a nine-ending price would be weaker for higher-priced products. The findings indicate the existence of a novel boundary to the left-digit effect.
Study 8 is designed to further to explore how the dimensions of psychological distance and motivation affect the left-digit effect. The results suggest that the left-digit effect occurs when participants have a time constraint or have a low motivation to process information; it does not occur when participants have sufficient motivation to process information and the time constraint is less. In other words, when the motivation to deal with information is high and there is little pressure, consumers are more likely to process information systematically which tends to weaken the left-digit effect. | en_US |