How do reference points influence choices?

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Reference points influence choices by framing a decision in the context of what is already known or experienced. Research suggests that when making decisions, people use their reference points as the starting point to make comparisons between choices and consider how much they need to change or adjust to reach their desired outcome. For example, when shopping for a car, someone might use the price of a friend's vehicle as a reference point to compare the cars they are considering. Depending on the desired features, someone may adjust their decision to either increase or decrease the price of the car they're looking at. By considering these reference points, individuals can make more informed decisions based on their own preferences.

Answered by Mark Goodwin

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