Question

An article in the New York Times about J.C.​ Penney's pricing strategy under former CEO Ron Johnson​ observes: ​"Penney had pulled up the​ anchor, only to see many of its customers sail​ away." ​Source: Stephanie Clifford and Katherine​ Rampell, "Sometimes We Want Prices to Fool​ Us," New York Times​, April​ 13, 2013. In behavioral​ economics, an​ "anchor" is A. linking the price of one product to another product. B. relating an unknown value or price to another similar known value or price. C. setting the highest possible price for a product. D. setting the lowest possible price for a product.

Answer 1

Answer:

B. relating an unknown value or price to another similar known value or price.

Explanation:

Anchoring is the term used to describe a phenomenon where individuals after being exposed to a particular figure (in this case a price) tend to subsequently use that figure as a reference point.

Thereby fixing of future prices will be biased towards this figure.

In this instance an anchor was in place and kept the customers loyal. But when Penney pulled up the​ anchor, many of the ccustomerswent away.