I think she anchored my dish based on yours.– Luka in dismay after paying 5myr more than usual for his lunch
Anchoring is a cognitive bias where we rely too heavily on the first piece of information we get. It’s often used in pricing and negotiation. One extremely highly-priced piece of art can make the still-kind-of-expensive prints look like a deal.
Like any mental model, it’s helpful to have a fun or emotional story to be able to deeply understand it. This is mine.
The Octopus Decides
Last time I was in Malaysia, my colleagues took me to a food court for lunch. One of the options was a buffet with a variety of meat and vegetable dishes (mostly cooked in a Malay or Chinese style).
It wasn’t an “all-you-can-eat” buffet where you pay upfront and eat until you’re full.
Instead, you filled up your plate and then took it to the cashier.
When I asked my colleague how the cashier decided the price, he told me that it was almost as if an octopus was deciding (like Paul the Octopus, who decides the winner of football matches). In other words, an unpredictable magic heuristic.
The Octopus Finds a New Anchor
A normal price for a local was 8MYR. One of my colleagues made it up to 12MYR once.
So I stacked my plate with everything I thought looked good and took it up to the cashier. I saw a smirk appear and quickly vanish before she told me the price…”15 MYR”.
And then my colleague, who ate there everyday and got his normal portion went up next…”15 MYR”.
I chuckled and apologized to my colleague after seeing his price.
“I think she anchored my dish based on yours,” my colleague responded.
The food was good, though!