Why things cost 499 and not 500 ?

Almost all price tags have numbers ending in 9, like 499, 899, 999, etc. I always have wondered what was the logic behind the pricing.

A recent paper explains it. It says that people calculate the worthiness of a  product in whole numbers and pricing not in whole numbers confuse the consumers.

buyers were less likely to negotiate the price down as far when they encountered a precise asking price.

This is another reason. It gives an illusion that the seller has calculated the price precise to the last digit.

One more tactics might be to make the price look lot lesser than actual price. For example, 999 is not 1000, which also means it is 3 digits and not 4 digits. Since we read from left to write, it looks lot less.

One more argument is that store owners don’t want cashiers to do the math in mind and want them to do the math in the machine and in turn make them enter the sell in the system. This too sounds reasonable.

I guess lot of research needs to be done.