Consider this experiment. A group of students were shown a series of products. There were a couple of bottles of wines, a couple of computer components, and a couple of unrelated products. Each student was given a sheet with the products listed on it. They were asked to write the last two digits of their social security number at the top of the page.
. . . . .
Then they were asked to write that number in the form of dollars (e.g. $43) next to each product listed. Then they were asked to write whether they would pay that amount (e.g $43) for each product by writing yes or no next to each product. Finally they were asked write the maximum amount they would pay for each product.
. . . . .
The students with social security numbers in the top 20% (80-99) placed bids from 216% to 346% higher than those with social security numbers in the bottom 20% (01-20). As an example, the top 20% bid an average of $56 for a cordless keyboard while the bottom 20% bid an average of $16!
. . . . .
What happened in this experiment was that students were asked to consider buying items at that price. That contemplation created an anchor that then subsequently influenced what they were actually willing to pay. The anchor was completely arbitrary.
Irrational Decisions – Anchoring and Arbitrary Coherence [The Rat Race Trap]
Hi Ben. Thanks for linking my article here!
Any time. This article was my first stumble onto your website, and I’m happy to link others to it! @Stephen – Rat Race Trap