# Cognitive bias of comparing numbers on a relative scale

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?

• 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 :) Sep 8, 2016 at 7:47