Anchoring effect

Ever bought a car thinking it's a great deal only to regret it later?

Imagine you're shopping for a car. You see a car priced at 20,000, but you know it's not a good deal. However, seeing it next to a 30,000 car makes it seem like a bargain.

The first car's price makes you compare it to the 30,000 car, creating a mental anchor. This anchor skews your perception, making the 20,000 car seem like a better deal than it actually is.

Example

You see a car for 20,000 next to a 30,000 car. The 20,000 car feels like a great deal because of the 30,000 anchor.

Remember this

The 30,000 car creates an anchor, influencing your perception and making you think the 20,000 car is a better deal than it really is.

Text adapted from Wikipedia, licensed under CC BY-SA 4.0.

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Educational content, not financial advice.

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