Developing Intuition for Prices in Euros: Rescaling or Relearning Prices?

Abstract

This article examines how numerical intuition for prices develops after a major change in currency. University students in Portugal (Study 1) and Austria (Study 2) made price estimates for 40 different items from November 2001 to June 2002, surrounding the time at which these countries switched to the euro. Overall results are more in accordance with a relearning hypothesis, considering that price estimates become progressively more accurate by a process that is related to buying frequency and, hence, is faster for frequently bought items. An alternative global rescaling hypothesis received mixed support. Results also suggest that price estimations in euros have not yet reached a level of accuracy comparable with estimations in the former national currency.