Mistakes in decision-making

Need to know

What you need to know

• An 'anchor' is the first piece of information a consumer receives.
• Consumers over-rely on this anchor when evaluating a product or price.
• Common examples include original vs. sale prices, MSRPs, and suggested donation amounts.
• This bias can make subsequent prices seem higher or lower than they are objectively.

Explanation

Mistakes in decision-making

1. An 'anchor' is the first piece of information a consumer receives.
2. Consumers over-rely on this anchor when evaluating a product or price.
3. Common examples include original vs. sale prices, MSRPs, and suggested donation amounts.
4. This bias can make subsequent prices seem higher or lower than they are objectively.