“…the average person treats a price ending in .99 as if it were 15 to 20 cents lower.”
The tendency is called left-digit bias, when the leftmost digit of a number disproportionately influences decision-making. In this case, even though the real difference is only a penny, research shows that, to the average person, $4.99 seems 15 to 20 cents cheaper than $5.00 – which results in selling 3 to 5 percent more units than at a price of $5.00"
My favorite is gas is (for example) 2.99 and 9/10ths. Talk about desperately reaching for that left-digit bias.
Whenever I visit the US and see the gas stations with the 9/10 cent sticker pasted on the signs it makes me laugh internally.
Here in the UK our petrol prices end in .9 pence 🙃