Anchor effect

In your daily life, you buy various things, and of course, you aim to spend your hard-earned money wisely. Unfortunately, when you shop for products, your mind can do a lot of illogical thinking and make you pay more than what the products are actually worth! One example of such thinking is what psychologists call the “anchor effect” and we will discuss it here. Salespeople often use it to trick you, so it is worth being aware of it!

The anchor effect is that when your mind sees a series of numbers, it attaches more importance to the first number it sees. In the example below, the mind sees a series of prices, but it especially keeps note of the first price that it saw, i.e. 1000.

When your mind needs to compare all the prices it compares everything only to the first price it saw, rather than comparing the prices with each other as well. For example, it will compare 1000 with 600, but not compare 600 with 300 or 300 with 320.

This way of comparing numbers is meaningless, as there is nothing special about the first number that was seen, and it can lead to one misjudging other numbers as shown in the example below.


Mary was looking to buy a dress for an important event and she visited an online shop to buy one. As she visited the site, the first dress shown to her had a price tag of 1000 dollars. While the dress looked good the price of 1000 dollars was way beyond what she could afford.

Mary moved on to see another dress and saw that it cost 600 dollars. Mary was thrilled that this dress was so much cheaper than the price of the first dress she saw and she quickly bought it.

In reality, 600 dollars was still way more than what Mary could afford to spend on a dress. What happened was that the anchor effect made her feel that it was a bargain, because she only compared 600 dollars with the first price she saw, i.e. 1000 dollars.

She should have compared 600 dollars with the other prices as well and this would have made her realise that 600 dollars is expensive. This would have given her a more realistic view of the average cost of dresses, rather than being influenced only by the first price she saw.


Salespeople can use the anchor effect to trick you. Shops often display a few products that they know are too expensive for most people to buy. They just put them there for the shopper’s minds to get anchored to the high prices. This then tricks the shoppers into believing that everything else in the shop is a bargain. Resist the temptation to only compare the price with the first price you have seen. Instead, make sure to check out other prices as well.