The blog "You Are Not So Smart" recently blogged on a very interesting subject called "Anchoring Effect."
The shortened version of the blog post - as decision makers, our perception of value or the "starting point" is heavily influenced by other numbers our points of reference we have seen related to that decision, regardless of whether these numbers have any firm grasp in reality.
Exhibit A - Have you ever shopped online at Overstock.com or REI-outlet.com? When you're looking at the items on sale, do you ever look at the % discount from the original price, rather than the sale price? If two items of similar utility both cost $50, but one was originally $400 and the other was $89, I will always buy the first.
Would you buy a $5,000 Armani suit if it was "on sale" for $750 or a $300 suit from Joseph Bank marked down from $350? Fact is, they were both stitched in the same factory in Bangladesh and cost $50 for materials and labor. :)
Food for thought!
Here's the link to the full article!
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