NOVEMBER 17, 2020
1. Anchoring Effect
It is the tendency of individuals to give more importance to the initial piece of information – the anchor – over everything that follows. For example, if a T-shirt costs Rs 1,000 without a discount, while another one costs Rs 1,000 but its seller strikes-out the MRP of Rs 2,000 to reveal its discounted price.
3. Scarcity Bias
It is the tendency to give greater importance to products that are scarce. Typically an online seller will display there is only ‘one’ or ‘limited’ stock remaining to create a sense of urgency among buyers. Count-down timers run on websites to indicate that the deal will expire in the next 15 minutes.
4. Sunk Cost Fallacy