The article is very interesting on the psychology of how it works and anecdotally I would completely agree with the findings.

However, the title is putting the cart before the horse. Just because people respond to things this way, it is not the cause of the tradition.

The best researched article I could find (that matches a story from an old book I once had) about the origins of the $.99 can be found here http://www.straightdope.com/classics/a3_166.html