So what you’re telling me is that the marketing honchos think, no wait, they KNOW that there are enough people stupid enough to think they have to buy ten to make this an effective ploy.
BTW, I just saw this week’s grocery ads, and one store’s circular was nearly all 10 for $10 items. This obviously ain’t going away.
Correct - it is described in the book Why We Make Mistakes. Just putting a number into someones head biases them in that direction. The author mentions a study across 86 grocery stores in which multi-unit pricing (x for $y) resulted in a 32% increase in sales compared to single-unit pricing.
Advertising a limit on sales has a similar effect. Putting up a notice saying “Limit 12 per customer” increases sales.
Quite. In fact the scenario in the OP I’ve never seen in the UK. Apart from mistakes (e.g. Buy one for .99, or two for only 1.99!).
If it says 5 for 5 pounds or whatever, the implication is that that is a special bulk deal, and the you won’t get such good value on a lower quantity.
And…that’s quite natural, isn’t it? Just like how buying an individual can of soda is more expensive than the price of a six pack / 6?
Bulk pricing isn’t rare in the U.S. either. Some locations just have weird laws about such things but it isn’t typical. What you will see if small variations on the same idea with different rules in fine print. Sometimes you can just buy 1 item during a 10 for $10 sale for $1 but often you have to pay more per unit. I used to work on Point of Sale software and the modern ones can easily handle whatever promotions a standard chain would want.
My local Acme does something called “Fav 4” in their meat department. Various meat items have big yellow stickers on them that say “Fav 4”. You can choose any 4 items for $19.99. There are a variety of things that have the sticker; both name brand prepared things and generic meat. For example, they often have packs of two filet mignons that are stickered. Another thing is branded packs of frozen hamburger patties. Sometimes they’ll have generic meat like a pack of chicken breasts. I can get a couple of filet mignons, a pack of eight burgers, 3 chicken breasts, and 3 pork chops for $19.99.
In this case you do have to buy 4 to get the deal.
If anyone doesn’t believe in anchoring, here is an experiment we conducted in the tutorial my daughter and I teach. We gave the class a simple questionnaire. Half got
“The failure rate of integrated circuits in the field is < 10 per million. Y/N”
We then asked them to estimate what it was.
The other half the class got
"is the failure rate of ICs > 10,000 per million? Y/N. " Very high. Then we also asked them to estimate it.
There is no right answer to the main question, since there is not enough information about the distribution of ICs to even guess. Yet the mean response of those who got the < 10 ppm question was significantly below that of those who got the > 10k question - there wasn’t even overlap.
We asked a similar question about the height of Mt. Everest, but I like the first one best since no one could bring in the real answer. It is a truly amazing effect.
Another book I have just read, The Science of Fear, reports an experiment in which two groups of people were asked about Gandhi’s age at death. People in the first group were asked if he was older than 9, then were asked to estimate his actual age. The second group were first asked if he was younger than 140. (People who knew the answer were excused.)
One would think that the obviously ridiculous ages used in the first question could not possibly influence the outcome. However, the first group estimated his actual age at death as being an average of 50, and the second group as 67.
Let me lead off and say that I know what anchoring is and agree that it does affect some decisions people make.
I agree that this is an example of of anchoring (assuming the people all knew that Gandhi meant the famous Gandhi so that 9 couldn’t have been a correct answer. However, I disagree that the first example necessarily indicates anchoring because the lead-in could have been interpreted as providing useful information. For example, suppose you knew nothing about the actual failure rate of ICs but thought that others might. There are two questions on the “test.” Suppose I assume they are reasonable questions to test knowledge about ICs. Further I know nothing about that failure rate, but that others taking the test might. Then it is logical to assume that the stated number is a reasonable number; that is, it is within the range of possible answers. This logically would lead me to guess the true answer is around the stated number.
In short, in the Gandhi example, it is not reasonable to conclude that the stated numbers contain any useful information, but in the IC example, it is reasonable to conclude that they do. That is not what is meant by anchoring.
I was once a street vendor, and a city slicker came up to me and said “how much is one [item]” - I said £2. How much for two? I said £3. How much for three? I said £6. He bought 3.
There is obviously a US/UK divide here, because in Britain, if it was advertised as “10 for £10”, pretty much everyone would assume that you had to buy all 10 to get the discount, and the small print would reveal that that was exactly so.
I’ve never seen it with such a high number as ten, though - it’s usually “Buy three for £2 (individual price 89p each)” or something like that.
Surely the whole point is that if you buy more, you get a lower unit price? It doesn’t seem like such a complicated idea but obviously there’s a lot more to it that that 
nm
You would have thought so. I could swear that most 3 for $2 deals here used to be (like 15-20 years ago) of the type you describe: individually, the items may be $0.89, but you need to buy in multiples of three to get the discounted price. And “buy one, get one free” deals meant you got two, not that each was half off. Makes perfect sense if you want to clear inventory, no?
Anyhow, my impression is that sometime in the last decade and a half or so, it changed, and more and more consumers are expecting 3 for $2 to mean $0.67 each, no matter the quantity. As I said above, in my area, true bulk pricing (where you actually have to buy multiple items to get the discount) still exists, but it’s slowly starting to disappear. I personally didn’t know until fairly recently–like in the last five years–that in many places 3 for $2 will ring up as $0.67 individually.
As people have noted above…
The powers that be probably noticed that people usually buy less than 10 things at a time. Saying 10 for $10 means that people will buy 10…more that they usually do.
To reverse it, the local supermarket, Asda, used to do three bottles of wine for £10. They changed it to three for £12, but it obviously didn’t work because it’s back to three bottles for £10.
The wine is usually one step above rubbish, of course.
First, the audience for my experiment are experts in the area of ICs and of IC failures. (As am I). As I mentioned, there is no correct answer to this question - unlike the Himalaya one. We didn’t check the answers to the anchoring questions, but I’d expect everyone got the same, reasonable, answer. And the effect still worked.
It is true that absurd questions still cause anchoring. I think the example my daughter uses in her section on this is if the average temperature in Chicago is < 600 degrees F. You still get anchoring.
It seems that discounts for more items are now done by buy 1 get 1 free (or buy 2 get one free, or whatever.) Of course unit prices for bigger sizes are (usually) cheaper, so that is another effect. Perhaps people who can only afford to buy 1 when there is a buy 2 deal feel ripped off?
I wonder if the buy x get y free strategy comes from research on the impact of free on consumer behavior. There have been some experiments, one reported on in
Ariely’s book, showing that something being free is fundamentally different from it costing even a penny.
Well now you mention it, I have a psychological glitch a bit like this.
Say I’m buying a bag of oranges. It’s buy one get one free. But I know from experience that I won’t get to the second bag before they go stale.
So I should just buy one bag…except I find that very hard to do. Oftentimes I’ll grab a different brand of oranges (that doesn’t have the deal) just so I don’t feel I’m getting “ripped off” :smack:
And, rarely, I’ll see something like “xyz three for 5 dollars, regularly 2.00 each, must buy 3” - where if I only buy one, I pay 2.00 for it, but if I buy three, it’s 1.6666666 apiece.
The much more common way is that even at 10 for 10 (or whatever), each item is the sale price. I did that just 2 days ago - only needed 2 of something, and they were a buck apiece.
I fully admit that I am influenced by advertising.
There is a product I like, it normally sells for $1.50-$2.00/unit, but from time to time goes on sale for 10 for $10. When it is on sale, I buy it in groups of 10. I’m well aware that I can buy just 1 for a dollar. But because they’ve suggested “buy 10 of these” I buy the suggested amount (or multiples of the suggested amount).
I don’t mean to say your example might not include anchoring, I’m only saying it’s much harder to conclude that it must do so. If the “anchoring” information appears to provide relevant information to participants, it is conservative (in a scientific sense) to not assign the cause to anchoring.