The anchoring effect is a type of cognitive bias, which is a systematic error in thinking that affects people’s judgments and decisions. When we shop, the first price we see becomes our “anchor,” influencing how we perceive the value of other prices-even if that initial price is irrelevant or artificially inflated. This can make discounts look bigger and deals sound better than they really are.
How Anchoring Affects Decisions
Let’s say you’re shopping online and see a pair of shoes originally priced at 200 dollars but now listed at 100 dollars. The 200 dollars price is your anchor, amand suddenly, 100 dollars feels like a steal-even if the shoe’s market value is really 90 dollars. This effect can make a normal price appear as if it’s a great bargain.
The Math Behind It
To understand if a deal is good, do a quick calculation to see if the “discounted” price is genuinely a deal. Here’s how you calculate the discount percentage:
Original Price - Discounted Price
Discounted Percentage equals (—————————————————-) x 100
Original Price
For instance, if those shoes are advertised at 100 dollars after being marked down from 200 dollars:
Original Price: 200 dollars Discounted price: 100 dollars
200 - 100
Discounted Percentage equals (———————-)
200
This indicates a 50% discount, but always assess whether the starting (anchor) price was realistic!
Real Life Examples
Imagine you’re in a grocery store, and you see a 5 dollar box for 10 dollars right underneath. That 10 dollars is your anchor. It tricks you into seeing the 5 dollars is the regular selling price elsewhere.
Practical Steps to Analyze Deals
Identify the anchor price Calculate the discount percentage using the formula above. Compare the final price with similar products elsewhere. Make a decision based on real value, not just the perceived deal. 
