A cognitive bias we run across frequently…
Also called the relativity trap, it’s our tendency to compare and contrast sets of items that have been restricted in some way. It’s called the anchoring effect because we tend to fixate on an initial number (the anchor) which then becomes the basis for comparison to everything else.
The classic example is an item at the store that’s on sale; we tend to see the difference in price rather than the overall price itself. You’ll see price tags asking you to compare some low price to, say, $187, but presenting no real evidence that $187 was ever the actual price of the merchandise. It has the effect of making you think you are saving money.
The area of retail sales makes big use of this bias. It’s one reason restaurant menus highlight very expensive entrees but also include items that seem more reasonably priced. If there are a number of entrees on the menu priced at $60, an entree at $40 will seem like a good deal even though it may not be. It’s also why we tend to go for the middle option when we have a choice—somewhere in between too expensive and too cheap. We should take into account the question of who set this apparent range in prices and for what purpose. Is it an honest effort to show the range of options or is it an attempt to push our thinking in a particular direction in order to mislead us?