Effects

The effects library

The psychology behind spending, one effect at a time: what it is, the study that found it, how sellers use it and how to push back.

Pricing and price perception

Anchoring effect

Leaning too heavily on the first number you see, so later estimates and prices stay close to it.
Denomination effect

Spending money more easily in small bills or coins than when the same sum comes as one large bill.
Loss aversion

Losses feel larger than gains of the same size, so avoiding a loss can matter more than winning.
Pain of paying

Feeling a small sting when money leaves your hands, a sting that fades when paying feels less real.
Veblen goods

Wanting something more because it carries a higher price, as if the price tag were part of what you buy.
Zero-price effect

Choosing a free option over a better deal because a price of zero makes the free thing feel more valuable.

Choice-supportive bias

Rating something higher after choosing it, and remembering the rejected option as worse than it was.
Endowment effect

Valuing a thing more once it is yours, so giving it up feels costlier than getting it.
IKEA effect

Valuing things more because you built or assembled them yourself, even when the result is rough.
Set completion

Feeling pushed to fill the gaps in a set, even when the set is arbitrary and you know it.

Bandwagon effect

Wanting something more because many other people already have it or are buying it.
Conspicuous consumption

Buying things others can see, such as cars, clothes and logos, to show your standing and earn their regard.
FOMO (fear of missing out)

The uneasy sense that others are enjoying something without you, which pushes you to join, check or buy.
Keeping up with the Joneses

Spending to match the people around you, so their purchases quietly set the standard for yours.
Reciprocity

Feeling you owe something back after a gift or favor, and repaying it by buying from the giver.

Commitment and consistency

Saying yes to a bigger request after agreeing to a small one, to stay consistent with your earlier choice.
Complete the look

Buying the other pieces of a set that signals a look, role or room, because one piece alone looks unfinished.
Licensing effect

Treating a good choice, like a workout or a saved paycheck, as permission for an indulgence afterward.
Retail therapy

Buying treats for yourself to lift a low mood, often more than you planned to buy.
Symbolic self-completion

Reaching for gear, clothes and symbols of an identity you care about when you feel you have not earned it.

Gruen effect

The moment a store's design pulls you from your errand into browsing, so you buy things you never planned.
Impulse buying

Feeling a sudden, strong urge to buy something right away, and buying it without having planned to.
Mere exposure effect

Liking something more simply because you have seen it often, even without noticing the repetition.
Scarcity effect

Valuing something more because it seems rare, about to run out or hard to get.

Goal-gradient effect

Speeding up effort or spending as a goal or reward gets closer, even when the progress was handed to you.
Hedonic treadmill

Getting used to any improvement, so the lift from a new purchase fades while the higher baseline remains.
Hyperbolic discounting

Preferring a smaller reward now over a larger one later, even after planning the opposite at a distance.
Lifestyle creep

Spending rises to meet each raise, so a higher income brings a higher cost of living instead of savings.
Projection bias

Buying for how you feel right now, assuming the hunger, cold or excitement will still be there later.

Decoy effect

Adding a clearly worse option makes the option that beats it look better, so more people choose it.
Framing effect

Choosing differently when the same offer is described in different words, such as gains instead of losses.
Mental accounting

Treating money differently depending on where it came from or what it is for, though every dollar spends the same.
Paradox of choice

Too many options can make choosing harder and less satisfying, so people delay, give up or grab a bundle.
Status quo bias

Sticking with the current or preset option, even when a different choice would serve you better.
Sunk cost fallacy

Continuing to spend time or money on something because of what it already cost, not what it will deliver.