The first number

The first number you hear becomes a handle, even when it should not. A kettle shown at eighty pounds makes forty-five feel like a bargain. A chart that starts at ninety-five makes a small gap look like a cliff. Anchoring is the handle. The chart trick is one way a handle gets drawn. Before you judge the second number, ask what it should be compared with: similar prices, or the whole scale from zero. Write that comparison down. The first figure is not a reason.

Cognitive bias

Anchoring

Anchoring is the pull of the first number or fact you meet. Later figures are judged against it, even when the first figure was arbitrary or a deliberate high price. A relevant comparison breaks the pull.

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Mini check

A shop first shows a kettle at £80, then a "reduced" one at £45, and the £45 feels like a bargain even though similar kettles sell for £30. What is doing the work?

Anchoring: the first price is doing the work, not the market.Survivorship: the kettles that failed have been left out of view.Sunk cost: money already spent on a kettle makes the £45 feel cheap.A fair comparison with what similar kettles actually sell for.

A bar chart's vertical axis starts at 95. Sales of 96 and 98 look like one bar is three times the other. What is the real change?

About 2%: the cut-off axis exaggerates a small rise.Sales roughly tripled, as the bars show.Sales doubled, because 98 is near 100 and 96 is near 95.Nothing can be said, because charts never show real numbers.

Try it today

When a price or a forecast is the first figure you see, name one comparison that does not use it.

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