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Anchoring Bias: How to Avoid Irrational Conclusions

by
Patrik Edblad
|

Imagine that you’re out shopping, and as you walk into a clothing store, you spot a jacket you like.

You try it on, check yourself out in the mirror, and decide you have to have it.

Now, imagine the following two scenarios:

  1. You check the price tag, and the jacket is $500. But a salesperson walks by and says: “I’m sorry. That price is wrong. The jacket is really $300.”
  2. You check the price tag, and the jacket is $100. But a salesperson walks by and says: “I’m sorry. That price is wrong. The jacket is really $300.”

Which Jacket Would You Buy?

If you’re like most people, you’re much more likely to buy the jacket in the first scenario.

But that doesn’t really make sense, does it? After all, the price you’d have to pay are exactly the same in both scenarios.

So, how come we’re more comfortable buying in the first one?

The answer is what psychologists refer to as anchoring 1. As soon as we’ve read the price tag, we’ll use it as a reference point — an anchor — for everything that happens after that.

If the initial price was higher, we’ll feel like we’re getting a good deal. And if the initial price was lower, we’ll feel like we’re getting a bad deal.

Marketing Anchors

Marketers are well aware of this bias and use it to their advantage all the time. Here are some examples of anchoring strategies often used in marketing:

Everyday Anchors

Anchoring doesn’t just occur in purchasing decisions. There are many examples of anchoring in everyday life, such as:

Counteract the Anchoring Bias

As you can see, the anchoring bias has a huge impact on our lives.

So, as you draw conclusions, form judgments, and make decisions, keep this sneaky tendency in mind.

Ask yourself if you are giving adequate consideration to all the information available, or if you’re giving unduly weight to some prior reference point.

That way, you’ll avoid getting stuck to irrelevant and irrational anchors.

Footnotes

  1. Anchoring bias in decision-making