Title: Charmers versus rounders: Rent-price discontinuities in the German housing market

Abstract: We study the role of left-digit bias – a tendency to focus on the leftmost digit of a number – in the rent-price-setting behavior of landlords. We show that there are two types of landlords – which we coin charmers and rounders – and that their strategic behavior differs systematically. Using web data on German apartment listings we document that charmers exploit left-digit bias by increasing rent prices at salient apartment-size measures. In contrast, rounders aim to increase rent prices for all apartments, not taking advantage of limited attention. In addition, we provide evidence that landlords exploit behavioral biases to a larger extent in markets that grant them higher market power. Being able to identify heterogeneity in bias-exploiting behavior allows us to further our understanding of how price discontinuities evolve, even in high-stakes settings such as the housing market.