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| (187) | Another example of how price adjustment costs may affect the degree of passing-on is related to the existence of so-called ‘psychological pricing’. In many markets, typically retail markets, prices a little less than a round number are common, e.g. EUR 99 or EUR 19 900. The consumers may perceive such prices lower than they actually are. The use of such a pricing strategy may make it more likely that a direct purchaser chooses not to pass on an overcharge, as the change in price, for instance from EUR 19 900 to EUR 20 000, would lead to a significant drop in the direct purchaser's demand. The possible impact on the estimation of passing-on effects from the existence of price adjustment costs is further discussed in section 5.2.1.

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Source: EUR-Lex (Cellar) · retrieved 2026-09-25 · Text as adopted (Official Journal); later amendments are not incorporated in this text.