<p>It's been called “relative thinking” in a few places (eg
<a href="http://journal.sjdm.org/11/10921/jdm10921.html" rel="nofollow noreferrer">http://journal.sjdm.org/11/10921/jdm10921.html</a>). The earliest I can find is in a 2004 article by Ofer Azar. A Google Scholar search turns up many other references to the term as well.</p>

CC BY-SA 3.0
2017-10-06T07:44:26.733Z
2017-10-06T07:44:26.733Z
Jonathan Shi
<p>Is there a name for the bias of comparing numbers on a relative scale?</p>

<p>Here are a few examples.</p>

<p>The car salesman sells you a \$900 navigation system as an up-sell to a \$30,000 car.  It doesn't seem like that much because it 900 is a relatively small percentage of 30000.  And let's say a top quality system installed, away from the dealership is \$700; a difference of \$200.  </p>

<p>What causes us to think \$200 isn't that much?</p>

<p>But if shopping in a store where the top priced GPS was \$700 and all the others are priced around \$500, now \$200 seems too much.</p>

<p>Or how about a homeowner trying to sell a house for \$200,000 when a potential buyer bids at \$185,000 because of water damage in one room.  The seller accepts even though the cost to repair the damage might be only \$10000.  The \$5000 doesn't seem like that big of a loss for the hassle of having to do the repair, but in a lot of other circumstances (like selling a car) it's a deal breaker.</p>

<p>Another.  Take a trip to a neighboring town and you might go a mile or two out of your way to see an attraction you just discovered.  Take a trip across the country and you might visit a whole other state, hundreds of miles out of your way.</p>

<p>I know that anchoring bias can cause you to, for instance, perceive a price as being lower because of false higher price.  But is it the same as this relative scaling bias?  Or is this called something else altogether?</p>

CC BY-SA 3.0
2016-09-08T07:47:39.660Z
This has to do with the "utility" of these differences. The higher the values are (I.e. the more money you have), the larger the losses/gains should become for it to "matter". Look for Kahneman and Tversky on utility and value. Bet you'll get a more elaborate explanation there :)
Robin Kramer-ten Have
<cognitive-psychology><bias>
Cognitive bias of comparing numbers on a relative scale
Sam Washburn
# Cognitive bias of comparing numbers on a relative scale

(Asked by: username_0 on 2016-09-08)

Is there a name for the bias of comparing numbers on a relative scale?

Here are a few examples.

The car salesman sells you a \$900 navigation system as an up-sell to a \$30,000 car. It doesn't seem like that much because it 900 is a relatively small percentage of 30000. And let's say a top quality system installed, away from the dealership is \$700; a difference of \$200.

What causes us to think \$200 isn't that much?

But if shopping in a store where the top priced GPS was \$700 and all the others are priced around \$500, now \$200 seems too much.

Or how about a homeowner trying to sell a house for \$200,000 when a potential buyer bids at \$185,000 because of water damage in one room. The seller accepts even though the cost to repair the damage might be only \$10000. The \$5000 doesn't seem like that big of a loss for the hassle of having to do the repair, but in a lot of other circumstances (like selling a car) it's a deal breaker.

Another. Take a trip to a neighboring town and you might go a mile or two out of your way to see an attraction you just discovered. Take a trip across the country and you might visit a whole other state, hundreds of miles out of your way.

I know that anchoring bias can cause you to, for instance, perceive a price as being lower because of false higher price. But is it the same as this relative scaling bias? Or is this called something else altogether?

**Tags:** cognitive-psychology, bias

> **Comments:**
> **username_1**: This has to do with the "utility" of these differences. The higher the values are (I.e. the more money you have), the larger the losses/gains should become for it to "matter". Look for Kahneman and Tversky on utility and value. Bet you'll get a more elaborate explanation there :)  

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## 1 answers

### Answer by username_2 on 2017-10-06. Score: 4 | Accepted answer

It's been called “relative thinking” in a few places (eg
<http://journal.sjdm.org/11/10921/jdm10921.html>). The earliest I can find is in a 2004 article by Ofer Azar. A Google Scholar search turns up many other references to the term as well.


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