Some high-end retail stores that distribute mail-order catalogs will prominently offer some very high priced goods for sale (for example, a luxury sports car with gold-plated interior trim) in addition to their regular line of merchandise. Behavioral economists argue that the stores do not really plan to sell these goods, but they use these items to provide the customers with a high reference point for the prices of the other goods in the catalog. This practice is an example of:
A. the ultimatim game.
B. loss aversion.
C. anchoring.
D. none of the above
Answer:C
Some high-end retail stores that distribute mail-order catalogs will prominently offer some very high priced goods for sale (for example, a luxury sports car with gold-plated interior trim) in addition to their regular line of merchandise. Behavioral economists argue that the stores do not really plan to sell these goods, but they use these items to provide the customers with a high reference point for the prices of the other goods in the catalog. This practice is an example of:
A. the ultimatim game. B. loss aversion. C. anchoring. D. none of the above