You're selling your house. You set the asking price at a nice round figure—$420,000, let's say. But if you had chosen to list the house for $420,399—almost $400 more—your chances of finding a buyer just might improve.
This finding, and others like it, derives from studies undertaken by marketing professor Manoj Thomas and colleagues at Cornell University's Johnson School. Thomas and other consumer marketing researchers have found that people have an innate tendency to downplay the magnitude of precise numbers, such as $325,437, also known as "sharp" numbers, compared to imprecise figures ending in one or more zeros—the familiar round numbers like $325,000.
—Dirk Hanson, "'Sharp' Numbers Sell Houses," Blogcritics, October 3, 2007
The researchers hypothesize that everyday experience teaches us that round (imprecise) numbers are usually larger than nonround (sharp) numbers.
—"Random Samples," Science, September 21, 2007
This paper compares sharp versus round numbers in advertising claims. Round numbers have a salient conceptual basis (e.g., 10 years are a decade). Sharp numbers do not (e.g., 7 years). Estimates tend to be expressed with round numbers. An experiment is described that examines whether consumers make the false assumption that claims using sharp numbers are less likely to be estimates (i.e., are more factual) than those using round numbers and, if so, whether this makes sharp-number claims more believable. The results demonstrate that such assumptions do occur, particularly for those consumers considered to be advertising skeptics.
—Robert M. Schindler, Richard F. Yalch, "It Seems Factual, But Is It? Effects of Using Sharp Versus Round Numbers in Advertising Claims," Association for Consumer Research, October 1, 2005