  We assess the role of cognitive convenience in the popularity and rigidity of
0 ending prices in convenience settings. Studies show that 0 ending prices are
common at convenience stores because of the transaction convenience that 0
ending prices offer. Using a large store level retail CPI data, we find that 0
ending prices are popular and rigid at convenience stores even when they offer
little transaction convenience. We corroborate these findings with two large
retail scanner price datasets from Dominicks and Nielsen. In the Dominicks
data, we find that there are more 0 endings in the prices of the items in the
front end candies category than in any other category, even though these prices
have no effect on the convenience of the consumers check out transaction. In
addition, in both Dominicks and Nielsens datasets, we find that 0 ending prices
have a positive effect on demand. Ruling out consumer antagonism and retailers
use of heuristics in pricing, we conclude that 0 ending prices are popular and
rigid, and that they increase demand at convenience settings, not only for
their transaction convenience, but also for the cognitive convenience they
offer.
