In the TV price example, the buyer purchases the $2,000 TV as a bargain, despite a cheaper option elsewhere. This lapse is attributed to which bias?

• A. Framing effect
• B. Representativeness
• C. Anchoring bias
• D. Scarcity

Answer: (C)

Anchoring bias is at work here. The first price you see becomes the reference point for judging value. When the TV is listed at $2,000, that amount sets an anchor in your mind. Even if a cheaper option exists, your sense of what counts as a “good deal” is still colored by that anchor, so the $2,000 TV can feel like a bargain in comparison or worth paying more for, because you’re evaluating it relative to the initial price rather than against a fresh, objective comparison. Since your judgment is pulling toward that anchor, you don’t adjust your evaluation as much as you should when a cheaper alternative appears.