An earlier number can influence a later numerical judgment.
ContestedReplications or meta-analyses disagree. Do not assume the effect.
Example
A reference price may change how a fixed selling price feels. Inventing an old price is not recommended.
Why it works
Numerical estimates can remain close to an initial value when adjustment is insufficient. Applications to pricing should be distinguished from general judgment research.
On the web
Help users establish needs and budgets, then attach comparable records to any reference price. A large reference number alone should not imply value.
When it backfires
The contested label here concerns applications to economic valuations such as prices. Maniadis and colleagues (2014) revisited willingness to accept payment for unpleasant sounds in Ariely and colleagues (2003), questioning the effect’s strength. This was not a replication of the 1974 general numerical-judgment tasks. Even documented price comparisons need their own conversion tests.
Sources
Discusses adjustment from an anchor in numerical judgments under uncertainty.
Tversky & Kahneman (1974). Judgment under Uncertainty: Heuristics and Biases. Open source
Reports arbitrary anchors influencing valuations of products and hedonic experiences; the original study to distinguish from later valuation research.
Ariely, Loewenstein & Prelec (2003). “Coherent Arbitrariness”: Stable Demand Curves Without Stable Preferences. Open source
Revisits the 2003 unpleasant-sound willingness-to-accept experiment and examines robustness and independent replication.
Maniadis, Tufano & List (2014). One Swallow Doesn’t Make a Summer: New Evidence on Anchoring Effects. Open source