![]() In a similar experiment, subjects were exposed to anchors that they themselves admitted were implausible (for example, did Mahatma Gandhi live to age 140 or age nine?) before being asked the question of interest (What was Mahatma Gandhi’s age at death?). Those who were exposed to the higher anchor (65%) estimated a much higher percentage than the other group. They were then asked to estimate the correct percentage. In an interesting experiment, researchers asked respondents if the percentage of African nations which were also a member of the UN was higher or lower than an arbitrary anchor (65% for some and 10% for others). ![]() A few moments ago you were ready to buy the watch if it were just Rs10 cheaper, and now you favour the option that is actually Rs50 more expensive! Why? Even if the sale price of that model were Rs1,050, the chances are still pretty good that you’d have opted for that watch instead of the “exquisite" model that was marked down from Rs1,500. ![]() Now which one would you buy? If you are like most of us, you’d prefer the “excellence" model. He happens to add that the “excellence" model’s original price was Rs2,000, while the “exquisite" model had an original price of Rs1,500. The salesperson then tells you that both the watches are on sale for Rs1,000. Given that both watches are equal in your eyes, even a small price difference (say, Rs10) would make you buy the lower-priced watch. You like both of them equally and are ready to buy the one that the salesperson is willing to sell you at a lower price. In the absence of any additional information, you are indifferent to choosing between the two. A salesperson shows you two watches that you find comparable. Let’s say you are in the market to buy a wristwatch. To examine this issue, let’s take a simple scenario.
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