how salesman fools our brain

 

If I give you a laptop without any price tag and ask you what should be its price. You would ask me for more information. But if I give you the same laptop with a price tag of 1000$. And ask you what should be the actual price of the laptop according to you. Now you can give me an answer. Researchers call this phenomenon the anchoring effect. In the 2nd case, our brain uses the number 1000$ as the anchor and adjusts the estimated price according to it. 

In another experiment, Dan Ariely asks participants to write down the last 2 digits of their social number. And then he gives a wine bottle without a price tag. He asks them if they would pay that much of $ the amount to buy the bottle. people with a higher number pay 5 to 6 times more than people with a lower number. The test shows 80-99 digits people pay on average 56$ and people with 10-20 on average pay 16$. 

We can see this effect when we buy things. If we see a shirt with a retail price of 100 but discounted down to 50$. Here our brain anchors to the higher price of 100$. For that reason, we estimate the price should be between 75-70$ (according to the research). Then we see the price disconnects 50%, this is the best bargain we could get. Although we don't know what is the real price of the shirt, it could be 30$. But as our brain anchors to the 100$ price,  paying 50$ for that seems a good buying decision. The shopping mall and online shopping sites always use this method. 

So when you try to buy something and see it at a discounted price ask yourself am I falling for the anchoring effect. One thing I do if I face any discounted price is that I took the lower (discounted) price. As my anchor and ask myself does this item cost this much or less. 

Use the anchoring effect to your advantage. To negotiate salary with the boss, think about what amount of salary you actually need. Ask your boss higher than that. When your boss says "No" discount it at your price. Your boss will most likely agree with it as he will anchor to your first offer.