Left-Digit Bias

Chapter 22 of my favorite textbook discusses diverse ways inwards which private decisionmaking deviates from criterion notions of rationality.  Here is a novel i to me (from the NBER Digest):

In Heuristic Thinking as well as Limited Attention inwards the Car Market (NBER Working Paper No. 17030), authors Nicola Lacetera, Devin Pope, as well as Justin Sydnor focus on the used automobile marketplace as well as enquire whether it is affected past times consumers exhibiting a heuristic, or brusk cut, known equally left-digit bias: the vogue to focus on the left-most digit of a publish piece partially ignoring other digits.

Using information that come upward from wholesale auctions encompassing to a greater extent than than 22 1000000 used automobile transactions, the authors document pregnant cost drops at each 10,000-mile threshold from 10,000 to 100,000 miles, ranging from most $150 to $200. For example, cars alongside odometer values betwixt 79,900 as well as 79,999 miles, on average, are sold for around $210 to a greater extent than than cars alongside odometer values betwixt 80,000 as well as 80,100 miles, precisely for exclusively $10 less than cars alongside odometer readings betwixt 79,800 as well as 79,899.

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