What biases influence consumer decision making?

1 Anchoring effect

The anchoring effect is the tendency to rely too much on the first piece of information we receive when making a decision. For example, if we see a product with a high original price and a discounted price, we might think that it is a good deal and ignore other factors, such as quality, features, or alternatives. The original price serves as an anchor that influences our judgment of the value of the product. The anchoring effect can affect our willingness to pay, our negotiation strategies, and our satisfaction with our purchases.

3 Confirmation bias

The confirmation bias is the tendency to seek, interpret, and remember information that confirms our existing beliefs, preferences, or expectations. For example, if we have a positive attitude toward a brand, we might look for positive reviews, ignore negative feedback, and recall positive experiences with the brand. The confirmation bias can affect how we search for information, how we evaluate alternatives, and how we form loyalty and trust.

4 Availability heuristic

The availability heuristic is the tendency to judge the likelihood or frequency of an event based on how easily we can recall or imagine examples of it. For example, if we hear a lot of news stories about plane crashes, we might think that flying is very dangerous, even though it is statistically safer than driving. The availability heuristic can affect how we assess risks, opportunities, and trends. The availability heuristic can also influence how we react to social proof, such as testimonials, ratings, or popularity.

5 Endowment effect

The endowment effect is the tendency to value something more when we own it or possess it than when we do not. For example, if we own a car, we might ask for a higher price to sell it than what we would be willing to pay to buy it. The endowment effect can affect how we attach meaning, emotion, and identity to our possessions. The endowment effect can also influence how we respond to scarcity, exclusivity, or ownership.

6 Status quo bias

The status quo bias is the tendency to prefer the current situation or the default option over any change or alternative. For example, if we have a subscription service that automatically renews, we might stick with it even if there are better or cheaper options available. The status quo bias can affect how we resist change, how we avoid losses, and how we justify our choices. The status quo bias can also influence how we respond to defaults, inertia, or commitment.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?