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March 23, 2018

Relative Pricing: Market Dictates Worth

You’re a rational person. As a rational person, if I tell you that you’re about to be tricked then you will be on guard, and less likely to be fooled.

Or so you think. Prepare yourself to be tricked while taking the following pop quiz:

1. Is the average temperature in San Francisco higher or lower than 558 degrees Fahrenheit?

2. Without looking it up, what is the average temperature in San Francisco? (Your best guess will do.)

3. How many Top 10 records did The Beatles release: More than 100,025 or less than 100,025?

4. Give your estimate of the number of Top 10 Beatles records.

Of course, the temperature of San Francisco is nowhere near 558 degrees; you know that, and I know that. But the point of the exercise was to plant a high anchor number in your head regarding the temperature of San Fran in order to influence your “best guess” as to the actual average temperature. Psychologist George Quattrone used the above questions to demonstrate the concept of “anchoring.” In his studies, participants who were given a high anchor number consistently came up with a higher temperature than those who were given a low anchor number. It made no difference how ludicrous the anchor number was. Read More

Originally posted 2013-12-29 13:56:00.

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About Wayne Jordan

Wayne Jordan is a Virginia-licensed Auctioneer (#3481), as well as an AIA and CAGA Certified Personal Property Appraiser. Learn more at http://www.resaleretailing.com/wayne-jordan-auctioneer-appraiser/

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