THE DISMAL SCIENCE

18% of U.S. graduate students in economics report moderate to severe anxiety

or depression—more than three times the rate in the population at large.
“Graduate Student Mental Health: Lessons from American Economics Departments,”
by Paul Barreira, Matthew Basilico, and Valentin Bolotnyy

RETAIL and so on) and the influence of product NEGOTIATION

placement are lower than in physical
People Make stores (no checkout lanes or end-of-
aisle displays), consumers may have an
The Power of
Healthier Choices easier time exercising self-control. For
retailers, “a more sophisticated online
“Phantom Anchors”
When Buying Online pricing strategy, that incorporates
the fact that the value of convenience
Those who study decision making
understand the impact of anchoring—
As more and more grocery shoppers turn appears to be different across the two a cognitive bias whereby someone
to the internet—some 4% of all groceries purchasing environments, would likely becomes overly focused on a piece of
sold in the United States in 2016 were lead to increased online revenues,” the information (the anchor) and fails to
bought online, and the share is projected researcher writes, while for policy mak- sufficiently move away from it. It can
to reach 20% within a decade—retail- ers, “initiatives that promote healthier be especially powerful in negotiations,
ers face increasing pressure to better choices (via product placement either where the first offer made has a strong
understand their habits. A new study in-store or online) could improve the influence on counteroffers and on the
comparing digital and in-store buying quality of food purchases.” final settlement. A new study examines
sheds valuable light. whether so-called phantom anchoring
The researcher examined the pur- has a similar effect.
chasing histories of 34,000 households ABOUT THE RESEARCH “The Effect of Phantom anchors are aggressive
over two and a half years, using scanner Online Shopping on Grocery Demand,” offers that are quickly retracted—for
data from a large supermarket chain that by Katherine A. Harris (working paper) example, someone selling a car might
began rolling out an online option in
2015. When ordering online, she found,
households were less price-sensitive and
less inclined to save money by searching
for substitute items; they spent $49
more a month, on average, than when
buying in-store. The increase was not
evenly distributed: People spent more
on categories that generally contain
nutritious items, namely dairy (an
average rise of 3.8%), fruit (5.9%), meat
(5.7%), and vegetables (7.4%), cutting
back on drinks (a decrease of 5.2%), oils
(4.1%), and snacks and sweets (13.6%).
These results are consistent with
behavioral theories that people make
better decisions when focused on the
future, the researcher says; the lag
between ordering online and receiving
the groceries could encourage healthier
choices. And because the level of dis-
traction (noise, the presence of children,

32 Harvard Business Review

May–June 2019
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