The following is a Twitter thread. Original source: https://twitter.com/G_S_Bhogal/status/1481766595911430156?t=BmJ7rK5dKnEw8mWUwD8r3g&s=19
We make decisions based on arbitrary benchmarks (“anchors”). Someone is more likely to buy a car if a more expensive car (the anchor) is placed beside it. In this case the anchor gives the buyer the impression that the original car is a better deal than it actually is.
MAN IN THE CAR PARADOX
You imagine that if you owned a fancy car, people would admire you. But in reality people focus on the car, not on you, and think to themselves “Man, if I owned a car like that, people would admire me…”