Event Details

Economics Research Seminar

Abstract: Using data from online shopping platforms in China, the U.S., and U.K., we explore how price digits affect price-setting behaviour. The estimates for the Chinese sample reveal novel evidence of superstitious price-setting, as prices with “lucky” “8” digits are 6-10 percentage points less likely to be updated. The effects of superstition are more pronounced for price increases, higher-priced items and during the month of Lunar New Year. However, we find no evidence of superstitious pricing or significant impacts of numerology on pricing patterns in the U.S. and U.K. datasets. Our findings provide a novel explanation for price rigidity based on price endings, highlighting the importance of behavioural factors in macroeconomic modelling.