The Anchoring Bias

“You want to buy an imaginary product X, which of the below options seem more lucrative to you?”

I conducted a survey few weeks back and asked this question to my network, a sample population of 120 people.

About 70% of them responded that they’ll go with the one whose price was reduced from $400 to $290 instead of the one whose price was simple $290.

You might also have seen many such examples while you’re scrolling through Amazon or roaming in a supermarket. The final price is the same right, then what makes the right option more lucrative?

It’s called the “Anchoring Bias”, where the customer entirely depends upon the initially provided piece of information and makes decisions based on it.

So, an initially given price of $400 (the anchor) gives you the impression that the reduced $290 is actually cheaper, which it is, yes, relatively. But on an absolute level, both options are the same.

This is a very common method how marketers build pricing strategies to influence consumer’s buying patterns.