ratchet effect



Tendency of people to be influenced by the previous highest (or best) level of a factor (variable). For example, workers' satisfaction from the current salary increment depends on how it compares with the highest increment received in the past.

Use ratchet effect in a sentence

  • You need to understand how a ratchet effect may change the market and quickly adapt to it as best you can.

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  • Even though John received a 4% increase in salary this year, it was not quite as good as the 8% he got a few years ago. This ratchet effect caused him to not enjoy the raise as much as before.

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  • The ratchet effect of reducing the size of a large soda, is people now feel like they are not getting their moneys worth of the product.

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