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Comment by frereubu | Hacker News Reader

Surely this has something to do with the anchoring effect:

- If you offer £210,000, it's a signal that you're looking at increments of £10,000.

- If you offer £211,000 it's a signal that you're looking at increments of £1,000.

- If you offer £211,000.01 then it signals that you're taking the piss.

I'm sure there's something about confidence and accuracy in there too, but I would expect anchoring effects to be stronger in those contexts.

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Don't forget, £210,999.99 is a bargain.

And something to do with taxation.

When you show me the price in GBP I assume the tax has already been added. That's only a thing for the US.

In the US, sales tax is handled on the state level not the national level. So it varies wildly.

To expand on that: it's on state, county, and city level - I believe all those jurisdictions can introduce a sales tax.

the store is able to compute it on the fly at the register, so they can also print price stickers* (for products that don't have the price on them)

showing prices without vat should be banned for sales that are never business-to-business.

* unless they also vary wildly by the week

I was talking more on the lines of exemption brackets. That's where the concept of xx999.99 price tags came from, rather than anything psychological.

Or if it's business-to-business, at least if the UK is anything like here in Denmark in that regard.

I guess a "precise" number would be more something like 210,980.55 than 211,000.01

It's a heuristic about the complexity of the number. If I have some idea bout the ways that you can come up with numbers, then the vast majority of numbers of low complexity were arrived at with short programs, or through rounding. Short programs tend to be heuristics themselves, and indicate estimates, and thus wide implicit error bars. Often even wider than the reported significance.

As long as there are still people negotiating this way, then it is rational to assume that people negotiate this way some proportion of the time and account for it in your own strategy. It's probably not stable in general.

I get what you're saying, but my point would be that the rounder the number you use, the more you're anchoring your negotiation to the rounding point, and the metric being used here seems to be the outcome of the negotiation. If someone says their price is £45,765 then the anchor is to the single pound. If someone says their price is £45,000 then the anchor is to £1,000s. I think there are both things - complexity and anchoring - at work, but I'd say the anchoring to the rounding point is actually most salient here and don't think it's necessarily much to do with perception of complexity, as attractive as that might be as an explantion.

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