The Anchoring Effect

Consumers often measure whether they got a good deal on a purchase by the difference between the original price and a sales price. The bigger the difference is, the better the deal feels. The original price a consumer is exposed to becomes a reference point, or an anchor. The April 2021 issue of Page One Economics® Focus on Finance explains the anchoring effect and the role it plays in the decisionmaking process when it comes to what consumers are willing to pay for a good or service.

Teachers: Visit the Reading Q&As in our Econ Lowdown Teacher Portal to find the high school/college and middle school teacher editions (including an answer key) for this issue; to assign an online version of the student materials; and to collect student scores on the questions.

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Education Level: 6-8 9-12 College Non-educators
Subjects: Economics AP Economics
Concepts: Opportunity Cost Decision-Making Incentives Wants
Resource Types: Publication Lesson
Languages: English