The anchoring effect is a cognitive bias where decisions are influenced by the first piece of information encountered, serving as an anchor for evaluation. In commercial real estate and project deadlines, this bias shapes expectations and perceptions of value based on initial numbers presented. Strategies for leveraging the anchoring effect in pricing include setting prices that end in '9', displaying daily instead of monthly costs, and presenting higher prices first to enhance perceived value.

1. Anchoring effect - ‘the first numbers matter the most’
What is it?
Anchoring effect is a cognitive bias and describes the human tendency to rely on an anchor when making decisions. This anchor, usually, is the first
piece of information that they receive in that particular context.
● When a commercial real estate mentions ‘ Two room bedrooms starting at $500/mo’, people will evaluate the rents on the website triggered by a
commercial based on this number: $500.
● The anchoring effect when setting up expectations for a project deadline. When you set up a specific date (30 April), stakeholders will remember that date
(the anchor). If the project timeline surpasses this date (e.g - 5 May), stakeholders will become frustrated. If the deadline has a different date (10 May),
when finishing the project on May 5, everybody is happy. Even if you consider setting up such a goal as “aggressive / ambitious”, the external impression
might be different.
● Pricing anchoring effect - prices ending in ‘9’ tend to be more interesting for customers, given that they tend to “anchor” their beliefs in the first figure that
they see: e.g. 59 is interpreted more a 50 than a 60.
Resources
● Anchoring effect with Daniel Kahneman
● Research on prices ending in “9” vs. other prices - academic paper
● Pricing and anchoring effect
● Who’s buying your product strategy - by Deloitte

2. Anchoring effect - riding on this bias
Different pricing display techniques
Display the daily price instead of the monthly price
By showing the price per day or month vs. the total price, it
can often seem like less.
Your customer will tend to use this smaller amount as an
anchor to decide whether the purchase is good value and,
even though the total price is the same ultimately.
Always price your products ending in “9”.
The first figure will serve as an anchor to the overall price.
Display a higher price when reading from left to right
Same principle as for pricing. People will read the higher
price first and will take it as an anchor. The bigger it is, the
more appealing the other prices will appear.
Descending prices as the default order
Same principle as above, people will see the first price (the
biggest) as an anchor.
E.g. - Unbounce pricing page