"Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor. For example, the initial price offered for a used car sets the standard for the rest of the negotiations, so that prices lower than the initial price seem more reasonable even if they are still higher than what the car is really worth."
If you wanted to do an early bird special, one solution might be to add something extra at the early bird tier (but keep the same price). Or even charge $1 more for something that seemed to be worth >$1 more but was unavailable otherwise. E.g. the early bird copies are signed.
Hmm. Ok. I'm thinking there might be some strategies to mitigate the anchoring effects, which definitely exist. It seems to me that it's a tradeoff, however, and it's not obvious to me which circumstances lead to one or the other being the best approach.
Comments
I have no data, but this Wikipedia article explains the theory:
http://en.wikipedia.org/wiki/Anchoring
"Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor. For example, the initial price offered for a used car sets the standard for the rest of the negotiations, so that prices lower than the initial price seem more reasonable even if they are still higher than what the car is really worth."
If you wanted to do an early bird special, one solution might be to add something extra at the early bird tier (but keep the same price). Or even charge $1 more for something that seemed to be worth >$1 more but was unavailable otherwise. E.g. the early bird copies are signed.
Hmm. Ok. I'm thinking there might be some strategies to mitigate the anchoring effects, which definitely exist. It seems to me that it's a tradeoff, however, and it's not obvious to me which circumstances lead to one or the other being the best approach.