A reserve of $23.15 will secure higher bids than a reserve of $23.00  Janiszewski and Uly tested consumer valuations of a television after supplying them with ‘precise value prices’. Three ‘precise value prices’ were tested. In each case, the consumer was asked to nominate the likely sale price in a department store. The findings were as […]

A reserve of $23.15 will secure higher bids than a reserve of $23.00  Janiszewski and Uly tested consumer valuations of a television after supplying them with ‘precise value prices’. Three ‘precise value prices’ were tested. In each case, the consumer was asked to nominate the likely sale price in a department store. The findings were as follows: Precise value price 1       $4998                   estimated sale price $4569 Precise value price 2       $5000                    estimated sale price $4158 Precise value price 3       $5102                    estimated sale price $4578 These findings suggest two things: the estimated price is tied to the precise value price rounding a precise value price delivers a lower estimate Building on ideas discussed previously, these findings point to the fact that prices and the perception of value are not absolute. Consumers base their perception of value on reference points. Further, consumers do not trust rounded prices and view them as less…