Price Point Strategy

It has the integration of macro economics and micro economics on the point of the theoretical researches. The integration bases on contemporary Western macro economics'micro reconstruction of the macro theory, i.e. New Keynesian Macroeconomics, as well as macro economics'reconstruction of the micro basement, i.e. New Classical Macroeconomics. This paper discusses on price points and price rigidity, which is the breakthrough of price rigidity's micro basement of Keynesianism.The psychological effects of price points are magic. price-setter that knows that her customers will ignore the last digit will have incentive to make price as high as possible. The commodity pricing feels very formal, more convincing, more reasonable, shaping a lower-price commodity image. Rational inattention suggests that there will be a discontinuity in price adjustment within the range of rational inattention. When changes in market conditions are not large enough to warrant a price change larger than the range of inattention based on the ignored digit, firms might rationally choose not to respond. the existing theories of firms'optimal reaction to consumers'rational inattention to the rightmost digits of prices are able to explain the actual practical importance of price points and their relationship to price rigidity. So firms may find it profitable to set those digits to the highest possible number.ChapterⅠdefines the concepts of price rigidity, and introduces the development of the foreign-related theories. ChapterⅡintroduces the development trends of the macro-variables theory based on the micro. The introduction takes the evolution from price rigidity to price sticky of Keynesianism. ChapterⅢanalyzes the phenomenon of price points and the transmission mechanism, which is how price points affect the price rigidity, pointing out consumers'rational inattention and firms'rational reactions are the Micro drivers of price rigidity .ChapterⅣanalyzes the price data of the typical product Apple(January 2008-August 2008),using price relative strength index, reaching a conclusion that it has the negative correlation between the variation of price and the variation of the price including price points. ChapterⅤbriefs the evaluation of price points and price rigid, pointing out that the research of price point and price rigidity realizes the reset of the Keynesian research model;The research of price point and price rigidity confirms the mixing tendency between neoclassical economics and new Keynesians, microeconomics and macroeconomics; The future of non-cash transactions will change the Institutional environment of price points, weaken the role of price points in commodities trading.This paper focuses on the micro causes of price rigidity's formation and the analysis of the empirical data. This paper also tries to provide an effective illustration for the integration of macro economics and micro economics on the point of the theoretical researches.