Podcast Summary: Nudge – “Can this ‘magic’ number change your behaviour?”

Host: Phill Agnew
Guest: Markus Huseman Kopeski (pricing expert, author, researcher at Freie Universität Berlin)
Date: March 9, 2026

Episode Overview

This episode of Nudge explores the “magic number” effect in pricing and behaviour, focusing particularly on the psychology behind 9- or 99-ending prices (known as “charm pricing” or the “nine-end effect”). Through research studies and practical applications, host Phill Agnew and pricing expert Markus Huseman Kopeski break down why these numbers influence consumer behaviour and share several actionable pricing tips for businesses. The discussion also touches on how these principles apply not just to product pricing, but to other domains like road safety.

Key Discussion Points, Research, and Insights

1. The Nine-End Effect and Road Behaviour

• Anecdote & Experiment in Road Safety
  • [00:00–04:00] Phill opens with a memorable 1988 news clip about the hazardous A19 road in North Yorkshire, introducing the high stakes of behavioural nudges in real-world contexts.
  • A 2021 driving simulator study (Padova and Trento University) tested whether reducing a speed limit sign from 50 to 49 km/h—changing just the left digit—affected driver speed.
    • Drivers who saw “49” or “69” limits slowed by 2–3 km/h more than those who saw “50” or “70.”
    • Quote: “A 1 km reduction in the limit had an overpowered effect on reducing speed.” (Phill, [03:37])
  • This demonstrates the powerful impact of small, strategic numerical changes on human behaviour—rooted in “left digit bias”.

2. Charm Pricing: Why do 9-ending Prices Work?

• Definition of Charm Pricing

  • [05:00] Markus: “Charm pricing pretty much means prices end in 99. So what do pricing 99 do to people? They do two things. First, they contain a meaning, a connotation… you think it must be cheap.” ([05:54])
  • Consumers associate 99-endings with bargains due to repetition in retail.

• Left Digit Bias

  • We perceive 49.99 as significantly less than 50.00, even when the difference is trivial, due to processing numbers left-to-right.
  • Example: $2.99 jam is perceived as 15% cheaper than a $3.00 jam. ([08:09])

• Empirical Evidence

  • 1996 Schindler & Kibarian study: Three catalogue price tests ($23, $22.99, $22.88):
    • No statistical difference in number of buyers.
    • 99 and 88-endings produced higher spending per customer.
    • Quote: “A 99 ending price…led to higher spending per capita compared to a rounded number.” (Phill, [07:37])
  • 2020 Left Digit Bias study: $2.99 perceived much lower than $3.00 ([08:09]).

3. When Not to Use 9-Endings: Product Quality and Context

• Perceived Cheapness and Quality

  • High-quality or high-price products can risk seeming low-quality if priced to end in 99.
    • Best for FMCG (fast-moving consumer goods) and lower price points.
  • Quote: “Sometimes a 99 appears cheap and in some cases you don't want to have your products appear cheap.” (Markus, [10:53])

• Better Alternatives: 95-Endings for Premium Products

  • [11:47] Jendal 1998: Durable goods over $50 sold better with 95-endings (e.g., $49.95) rather than 99.
    • Quote: “As soon as the price increases to 50, so the number 50 or beyond, 95 is more convincing and attractive…” (Markus, [11:05])

• Rounded Pricing for Hedonic Purchases

  • [12:29] For luxury or hedonic items (like champagne), round prices (e.g., “£40”) are preferred, as buyers associate rounded prices with wholeness and gifting.
  • Utilitarian products benefit from non-rounded or “odd” prices, signalling thrift.
    • Quote: “A bottle of Champagne should be €40… Now this should be round so that the price feels right and conveys the concept of wholeness and high quality.” (Markus, [12:49])

• 2015 Wadhwa and Zhang Study:

  • Hedonic products sold better at rounded prices; utilitarian products sold better at non-rounded prices. ([13:27])

4. Real-World Application and Underuse

• Survey by Richard Shotton: Only 1 in 3 supermarket prices end in 9; most end in zero. Despite its effectiveness, marketers underuse charm pricing, possibly fearing it looks “gimmicky.”
• Major retailers like Amazon & Apple use it consistently.

Additional Evidence-Based Pricing Tips

5. Tip 2: The Noticeable Difference Tip

• Context: When selling very similar products (e.g., two chewing gums), giving them identical prices leads to customer indecision and lower sales.
  • [16:19] Novembsky & Dhar 2013: When two products are the same price, only 46% of participants buy; with a small price difference (e.g., one at 620 won, one at 640 won), purchase rises to 77%.
  • Quote: “If you have two similar products, never give them the same price. Make it slightly different and you'll increase sales.” (Phill, [17:13])

6. Tip 3: Promotions – Discount vs. Freebie

• Small Discount vs. Free Gift
  • [17:46] Markus: “It works in particular if the discount that you give is very low…But if you would get them a TV set and a bucket of popcorn for 5 pound, they place a higher value on this 5 pound popcorn compared to the monetary value of 5 pounds off.”
  • 2003 Nunoz & Park study: Discounting pet food by $2 didn’t move sales, but including a free $2 item (can opener) increased sales. ([18:34])
  • Quote: “The sales discount didn't stimulate sales at all. Dropping the price by $2 didn't… but giving away the free can opener did help stimulate sales.” (Phill, [18:34])

7. Tip 4: Money Back Guarantees

• Willingness to Pay and Credibility
  • A strict, credible money-back guarantee raises product appeal, reduces perceived risk, increases purchase intention and willingness to pay—even if the product is priced higher.
    • [20:15] “Money back guarantees reduce the perceived financial risk. They lower the anticipated regret and increase product liking…They are more effective for experience goods and longer evaluation periods increase…credibility.” (Phill)
  • Counterintuitive finding: Stricter (yet fair) guarantees are perceived as more credible.
  • Quote: “The stricter this money back guarantee is, the more credible it is.” (Markus, [20:44])

Memorable Quotes & Moments

• [01:23] On the news clip: “The eye roll from Mr. Davidson as he watches the driver crash right after he tells the reporter that the road is safe. That's just golden TV.” (Phill)
• [05:54] Markus: “So what do pricing 99 do to people? …you think it must be cheap.”
• [07:37] “Those who saw a 99 ending or an 88 ending spent more than those who saw the rounded numbers.” (Phill)
• [12:49] Markus: “A bottle of Champagne should be €40… Now this should be round so that the price feels right and conveys the concept of wholeness and high quality.”
• [20:44] Markus: “The stricter this money back guarantee is, the more credible it is.”

Important Timestamps

• 00:00–04:00: Road safety story & “magic numbers” in behaviour
• 05:00–11:30: Markus introduces charm pricing, left digit bias, and key studies
• 11:47–14:00: When not to use 9-endings; pricing hedonic vs. utilitarian products
• 15:46–17:13: Noticeable Difference Tip (pricing very similar products slightly apart)
• 17:46–19:13: Free product promotions vs. monetary discount
• 19:19–21:05: Money back guarantees and how strictness increases perceived credibility

Tone and Style

The episode maintains its signature Nudge tone—conversational, energetic, and practical. Phill uses memorable anecdotes and research to make the science accessible; Markus complements with expert, concise explanations and real-world applications.

Takeaway Principles

• Use 9-ending or 99-ending pricing to signal “bargain”—especially for FMCG and utilitarian products.
• For premium or hedonic products, use 95-endings or rounded prices to signal quality.
• Never price similar products identically; small differences boost the likelihood of purchase.
• For small promotions, a freebie is more effective than a small discount.
• Money-back guarantees boost willingness to pay, especially when perceived as credible (sometimes via stricter conditions).

For Listeners

Phill wraps by promoting Markus’s book, the Nudge Vaults for applied behavioural science tips, and encourages subscribing for further pricing insights.

For marketers, product owners, or anyone interested in the subtle psychology of numbers, this episode delivers a research-backed, actionable toolkit for influencing behaviour through smart pricing.