Behavioural economics shows that consumers use mental shortcuts rather than fully rational choices: anchoring on the first price seen, loss aversion, responding to choice architecture and nudges, following social proof and reacting to scarcity. In the UK, these tactics are limited by consumer law and advertising rules on misleading practices.
| Effect | Example |
|---|
| Anchoring | A high 'was' price makes a sale price look better |
| Loss aversion | Free trials that people fear losing |
| Choice architecture and nudges | Default options and product placement |
| Social proof | Ratings and 'most popular' labels |
| Scarcity | Limited stock or limited-time messages |
The CMA enforces consumer law against fake urgency and drip pricing, now under the Digital Markets, Competition and Consumers Act 2024, in force from 6 April 2025, and the ASA applies the CAP Code to advertising.
Official sources: the ASA's CAP Code and the CMA.