#AIandBias

Imagine strolling through a Thai street market and spotting a finely woven silk scarf priced at 2,000 baht. Even if you suspect the true value is lower, that opening price anchors your thinking. When the seller offers a “special price” of 1,200 baht, it often feels like a bargain, even if the scarf’s worth hasn’t changed. This negotiation ritual illustrates the anchoring effect—a subtle mental shortcut that steers our choices.

Imagine entering a Thai street market and seeing a beautifully woven silk scarf with a price tag of 2,000 baht. Even if you believe the actual value is lower, that first price sets a reference point. When the vendor offers you a “special price” of 1,200 baht, it feels like a bargain—regardless of the true worth of the scarf. This common negotiation scenario is a classic example of the “anchoring effect,” a psychological phenomenon that subtly but powerfully sways our decisions, often without us noticing.