This is what I keep hearing but no one seems to be able to provide an explanation. Is it because 2.99 is high enough to be make the book respectable while 0.99 is low enough to make it easy for people to purchase it, while 1.99 is some sort of danger middle zone?
The $0.99 option sells better because it is the standard promotional price. Someone wanting a cheap read (defined as $0.99) will surf through the $0.99 books available on KDP or whatever.
I think you saw the idea here and at links within.
By this logic (I'm just gonna go with it) $1.99 is not promotional, it's twice the promotional cost--and therefore may not seem like a good deal. If the author wrote a good book it'd be more than that, so the thinking goes, and if you are lucky you'll catch that (more expensive) book on a 99c promotion.
But when it comes to marketing, $1.99 is nothing. It's like the 30% off sales rack with the shirts that are all the wrong shape and too-large neck holes. Now, you might buy something that is marked down 90% just because you know it's a good deal; very little sunk cost. But if it is marked down 30% or 50% you might just wonder if it was overpriced to begin with.
If it's full price you would only buy it if you wanted it--and pay full price--and that's a different sales model altogether.
That's my best guess, anyway.
The price in itself doesn't mean anything :
You sell something according to its value.
If you have the opportunity to buy a best-seller at $1.99, I'm sure that you will be tempted to buy it. If you see a crappy, short book sold for 0.99 or 2.99, I'm really sure you will never put a buck in it.
The value of one book will depend on many things like : - is the writer famous - does she/he has a good fan base - is the story great - what is the length of the book - and so on
Also, this study shows that $1.99 ebook tend to sell more than $2+ : https://justpublishingadvice.com/the-question-of-ebook-pricing/