Price-Denomination Effect: Choosing to Pay With Denominations That Are the Same as the Product Prices.

Building on past research on judgment anchoring, we investigate the effect of price information on consumers' choice of denomination when making a purchase. Across seven experiments, including two in the field ( = 4,020), we find that people tend to purchase with denominations that are the same as the product prices. They use larger denominations for higher priced products that are priced at the value of the denomination held, and smaller denominations for lower priced products that are priced at the value of the smaller denomination held.