A consumer decides to purchase a new automobile for the first time in 10 years. The price the consumer paid 10 years ago for a new midsize sedan was $18,000. The new sticker price for a similar automobile is now $26,000. The consumer decides that the new automobile is simply too expensive compared to the sedan purchased 10 years ago. Which heuristic likely influenced the consumer's decision?
anchoring and adjustment heuristic
confirmation error
associative play

anchoring and adjustment heuristic

Explanation:

Anchoring and adjustment heuristic is defined as the psychological way in which people asses probabilities. It states that people have a reference or anchor and the make adjustments to it in otlrder to reach an estimate.

The anchor is the price that the customer paid 10 years ago. That is $18,000. However the sticker price is $26,000.

The consumer feels this is too far away from his anchor from 10 years ago.

anchoring and adjustment heuristic

Explanation:

A large portion of our important and significant consumer decisions (mostly shopping products) are influenced by anchoring and adjustment heuristics. When we are looking for some expensive good which we generally do not purchase very often, we always anchor our perception of the good to any prior experience with it and then adjust our prior experience to our current environment.

In this case, the customer's reference price was the price he paid for a "similar" car 10 years ago and refuses to pay a higher price for a current model regardless that cars have changed a lot during the last 10 years. He didn't adjust his past reference (anchor) to how much cars have changed and how much value the currency has lost.

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