[everdrive]

I don't have any evidence for this, but intuitively it feels like this must be true for much of the bell curve of humanity. In other words, it probably doesn't work very well for some sets of folks. It's very easy to look at $18.99 and mentally think "$20 once taxes hit," which ought to dispel the illusion. It makes me wonder if there are some market segments which intentionally avoid this sort of trick since it is either ineffective or offensive to their customers. Sort of like how Wal-Mart doesn't generally sell luxury products, but in reverse.

[gsuuon]

I think it matters for the audience who's looking at that first number - so if $20 isn't a lot to you, you wouldn't care that it's $19. Comparable to a $1599 macbook pro. I think if there wasn't a positive effect on sales, large corps would've dropped it long ago.

[mike_hock]

> It's very easy to look at $18.99 and mentally think "$20 once taxes hit," which ought to dispel the illusion.

What illusion?

One possible explanation is that .99 prices are so well established that prices that don't end in 99 stand out, prompting a more conscious analysis by the customer. If round prices were the norm, it would work the other way. Similarly, if prices always ended in .01, those that didn't would stand out.

[mbs159]

In many countries in Europe the price of products is always written including tax.