How anchoring shapes what we buy

The anchoring experiment

Muzamil starts by asking a simple question: how many millions of stars are in the universe? The answer is neither scientific nor innocent. Ali deliberately anchored him by framing the question with the word millions, so Muzamil answered 500 million. The truth is roughly 1 billion trillion, but anchoring had already set the ceiling. Ali explains that anchoring works every time. “Had I said billion, you would have said 500 billion,” Ali tells Muzamil. The lesson reaches far beyond astronomy. When Muzamil shops for clothes, the prices he sees set anchors in his brain that determine what feels expensive and what feels like a bargain.

Beyond rational choice

“We like to believe that we are a lot of rational creatures,” Ali says. But behavioral economics has proven otherwise through decades of research. “We are actually not rational beings, and we don’t act on rationality as much as we’d like to think that we do.” This is not a failure of intelligence. It is how the human brain actually works. Muzamil nods in agreement. He has always assumed his purchasing decisions were thought-through, deliberate. Ali’s framework reframes every shopping trip as a guided choice influenced by anchors he did not set.

Why three jeans cost different amounts

Ali walks through a concrete example. A jeans store normally sells a pair for 10,000 rupees. If they introduce a new line at 17,000 or 18,000 rupees, “My consumers probably won’t buy it,” Ali explains. Loyal customers are anchored to 10,000. The jump feels unreasonable. But companies have tricks. They layer in middle options. Sometimes they introduce a higher-priced version not to sell many of them, but to reshape what feels reasonable about the middle price. Muzamil notices this happens to him constantly. “I always exceed my price range,” he admits. “No, man, we have to take it, and then we have to increase the features, and increase the features, and you go and go and get it.”

The chocolate experiment and the pull of free

Dan Ariely, a behavioral economist, ran an experiment offering two chocolates. A Hershey’s Kiss cost one cent. Another chocolate cost fourteen cents. Most people chose the one-cent kiss. Then Ariely reduced both prices by one cent. The fourteen-cent became thirteen. The one-cent became free. Suddenly, almost nobody bought the thirteen-cent option. “The value of free is something that we love so irrationally,” Ali says, “even though the other thing is very cheap.”

The same psychology runs through online shopping. Free shipping, sale prices, one-day-only offers. These trigger an irrational response in us. We know rationally that saving one cent is not a meaningful difference. But free rewires something in the brain.

The Economist’s three subscriptions

The Economist offered three subscription tiers in the early 2000s. Internet-only cost fifty-nine dollars. Print-only cost one hundred twenty-five dollars. Print plus internet also cost one hundred twenty-five dollars. Ali describes this as a dummy price. “They knew that no one was going to buy it,” he explains. The print-only option at one hundred twenty-five dollars existed to make print plus internet, also at one hundred twenty-five dollars, look like a steal compared to fifty-nine dollars for internet alone.

When researchers tested this setup with students, zero people chose print-only. But many chose the bundle at the same price. Then the researchers removed the print-only option entirely. Now students had two choices: fifty-nine dollars for internet, or one hundred twenty-five dollars for the bundle. Suddenly far fewer people bought the bundle. “That is the entire point for dummy price,” Ali notes. Companies use this tactic in every retail setting. A television advertised at fifty thousand, another at eighty thousand, a third at eighty-six thousand. The jump from fifty to eighty thousand now feels smaller, and you buy the eighty-thousand-rupee set instead of the fifty-thousand-rupee set you came in to purchase.

Why Pakistan spends differently

Muzamil notices something. In the West, people buy freely. In Pakistan, there is constant resistance to excessive spending, the concept of fuzul kharchi. But the mechanism is the same. Anchoring determines what is fuzul and what is reasonable. “Spending 5,000 on jeans for you might be fuzul kharchi,” Ali says. “For someone else, it might be a bargain, right? Someone else might go to some really up-class store where they want to get something on sale for 5,000.” The difference is not rationality. It is anchoring. Your anchors were set by what you have seen and paid before. Someone else’s anchors are different.

Anchoring in relationships

Ali extends the concept to intimate life. Say someone has been in three unhealthy or bad relationships. Then they meet someone who is kinder, more attentive than the previous three. “Because you’re anchored to expect emotional intimacy and care in a certain way,” Ali explains, “what you’ll end up doing is you’re going to see that value that so much more than what it objectively may be.” The bar was set low. This person clears it. And so anchoring, not actual compatibility, drives the decision to stay.

Muzamil points out that media also sets anchors. People who have never been in a relationship anchor themselves to media depictions of what love should look like. The result is the same: comparison to an internal benchmark, not assessment of the actual person or situation.

Strategic skepticism

Both Muzamil and Ali circle back to a question: how do you break free of anchors? Ali’s answer is reflection. “Ask yourself why,” he says. “Why did I choose this?” But Ali also warns against skepticism without boundaries. “If you’re skeptical about everything, then you’re skeptical about everything.” Conspiracy thinking can masquerade as skepticism.

Muzamil offers an example: the Azerbaijan-Armenia war. If you ask why, you discover layers. Is it religious conflict? Great-power politics? Then you learn about a gas pipeline to Europe and suddenly the conflict makes different sense. But without careful reasoning, endless why can send you spiraling into narratives that have no grounding.

Ali nods. “Strategic skepticism is necessary.” The point is not to question everything forever. The point is to notice what you are comparing things to, and to ask whether that comparison actually makes sense. Next time Muzamil buys a television, he should ask: what am I comparing this to? Is that comparison necessary? Is that the television I came in to buy?

Conclusion

Muzamil closes with a challenge to viewers. Do you really think you are rational? Do you really think that what you buy and what you decide is something that you fully chose? Or are you making comparisons without knowing what they are? “I can guarantee that you are,” Muzamil says. That is where self-reflection becomes powerful. It can help you break free of anchors that were set for you. The alternative is to spend your entire life, as Muzamil puts it, “being a product of society.”