You’ve spotted a winter jacket originally priced at 150 dollars, now on sale for 90 dollars.
What is the discount percentage? Is it a good deal compared to similar jackets priced at 85 dollars in the other store?
Using the formula 150-90
Discount Percentage equals (—————-)
150
Even though it’s a 40% discount, if similar jackets are 85 dollars elsewhere, it’s not the best deal. The anchor price made it seem better than it is.
Spotting these tricks helps keep more cash in you pocket. Remember to compare wisely!
Interesting Facts
Did you know that the concept of anchoring was first discovered in 1974 by behavioral economists Amos Tversky and Daniel Kahneman? In their experiment, participants guessed the percentage of african countries in the UN, influenced by a random number given beforehand. Those shown a lower number guessed 25%, while those with higher number guessed 45! This groundbreaking study highlighted just how powerful intiainitial information can be in shaping our judgments.
