Editing Anchoring effect (section)

=== Anchoring in pricing ===
According to the theory, consumers’ shopping experiences are influenced by factors such as time restriction and specific environment. Enterprises design would set anchor values for consumers in order to get them to buy the products. 
When persuading consumers to purchase a particular product, sellers might use anchoring. Sellers often influence consumers’ price perception by anchoring a high reference price and that is an anchor value.<ref>{{cite SSRN |ssrn=2410155 |first1=Lukas |last1=Merb |first2=Till |last2=Proeger |title=An experimental study on social anchoring |date=2014}}</ref> Following are three ways to set the anchor value for consumers.

==== Sorting the prices of products ====
Sellers usually sort the prices of products from high to low and this method is common seen on the menus of restaurants.<ref>{{cite journal |last1=Yang |first1=Chih-Yun |last2=Chang |first2=Te-Yi |date=2011 |title=Binomial real option pricing for restaurant menu analysis |url=https://journals.sagepub.com/doi/pdf/10.1177/1938965511410054 |journal=Cornell Hospitality Quarterly |volume=52 |issue=3 |pages=273–282 |doi=10.1177/1938965511410054 |s2cid=154889190 |access-date=22 April 2023|url-access=subscription }}</ref> The high prices at the top of the menu act as anchor values in this situation. Consumers will have an expectation that the products are all expensive when knowing the relatively high prices of products on the top of the list. As a result, they will be pleased to see the cheaper products at the middle and bottom of the list and regard these prices as acceptable or cheaper than expected. Therefore, they are more likely to buy these products.<ref>{{cite web |last1=Lazear |first1=Edward |last2=Malmendier |first2=Ulrike |last3=Weber |first3=Roberto |date=2006 |title=Sorting, prices, and social preferences. |url=https://www.nber.org/papers/w12041 |access-date=22 April 2023 |publisher=National Bureau of Economic Research |type=NBER Working Paper No. 12041 |doi=10.3386/w12041}}</ref>

==== Decoy ====
[[Decoy effect]] is defined as a situation where people tend to have a change in preference between two choices when they are showed with a third choice. The third choice is called a decoy which is designed to induce consumers to change their preferences. The decoy is usually considered as inferior. For example, it might be more expensive than option A while having lower quality than option B. In this case, the anchor is the decoy.<ref>{{cite book |last1=Stettinger |first1=Martin |last2=Felfering |first2=Alexander |last3=Leitner |first3=Gerhard |last4=Reiterer |first4=Stefan |date=2015 |chapter=Counteracting anchoring effects in group decision making |chapter-url=https://link.springer.com/chapter/10.1007/978-3-319-20267-9_10 |title=User Modeling, Adaptation and Personalization: 23rd International Conference |series=Lecture Notes in Computer Science |volume=23 |pages=118–130 |doi=10.1007/978-3-319-20267-9_10 |isbn=978-3-319-20266-2}}</ref>

One decoy effect example is the bundle sales. For example, many restaurants often sell set meals to their consumers, while simultaneously having the meals’ components sold separately. The prices of the meals’ components are the decoy pricing and act as an anchor which enables to make the set meal more valuable to consumers. With the decoy effect it generates, the anchor increases consumers’ willingness to pay for the set meals, or the mixed bundles.<ref>{{cite journal |last1=Schwartz |first1=Zvi |last2=Cohen |first2=Eli |date=1999 |title=The Perceived Value of Value Meals: An Experimental Investigation into Product Bundling and Decoy Pricing in Restaurant Menus |url=https://www.tandfonline.com/doi/abs/10.1300/J061v03n03_03 |journal=Journal of Restaurant & Foodservice Marketing |volume=3 |issue=3–4 |pages=19–37 |doi=10.1300/J061v03n03_03 |access-date=22 April 2023|url-access=subscription }}</ref>

==== Incidental prices ====
Incidental price is defined as the prices offered or showed by a seller for products which the consumers are not interested in. According to the theory, the incidental price serves as an anchor which increases consumers’ willingness to pay. This effect has been widely used in areas such as auctions, online vendors and retailers.<ref>{{cite journal |last1=Nunes |first1=Joseph |last2=Boatwright |first2=Peter |date=2004 |title=Incidental prices and their effect on willingness to pay |url=https://journals.sagepub.com/doi/abs/10.1509/jmkr.41.4.457.47014 |journal=Journal of Marketing Research |volume=41 |issue=4 |pages=457–466 |doi=10.1509/jmkr.41.4.457.47014 |s2cid=16827760 |access-date=23 April 2023|url-access=subscription }}</ref>