The Anchoring Effect
We tend to base our thinking on the first thing we see, and compare all other options to that.
Aphorisms
“Well, at least we’re not that bad.”
Examples
You might never consider a $2,000 watch, but merchants will put it next to a $10,000 watch to make it seem like a more reasonable option.
In early 2019, Representative Alexandria Ocasio-Cortez unveiled “The Green New Deal,” which was a legislation package for various proposed solutions to climate change, all considered to be on the extreme Left of the political spectrum. It had absolutely no chance of passing, but getting it in front of the electorate was likely a calculated more to make other less extreme proposals seem more reasonable.
Breaking the Bank for a Burger
"Economists have learned that when it comes to determining value, the brain can’t resist putting prices in context. When there’s a $1,000 frittata on the menu, says Mr. Reid, ‘There is an anchor in your mind. Suddenly, $26 for French toast seems reasonable.'”