prices on the basis of marginal costs and demand
elasticities, Cyert and March maintain that prices
are set by simple routines. Exclusive items and
import items excepted, the standard department
store markup rule is simple: ‘Divide each cost
by 0.6 (1-mark-up) and move the result to the
nearest $.95’ (Cyert and March, 1963: 138).
Other (more extensive) routines apply to sale
pricing and mark-downs (Cyert and March, 1963:
140–145). The predictive powers of these three
routines were thereafter tested with the following
results (Cyert and March, 1963: 147)