Nov. 28, 2012
The anchoring effect, a psychological phenomenon describing the common human tendency to rely too heavily on the first piece of information offered when making decisions, is a sales person's secret weapon, according to an article on io9.com.
Here's an excerpt from the article describing how the anchoring effect relates to retail:
Most people know that the prices of cars are a higher than they're supposed to be, and that negotiating a better price is the first step to buying a car. Try as they might, though, they will keep that original price in mind. Just suggesting the higher number will provide an anchor from which the person can't stray too far. This goes for everything, from shoes to designer jeans. Unless people do a comprehensive survey of the market, and study the realistic retail costs for most products they buy, they'll decide based on the initial price.
Read more about consumer behavior.