What is the anchoring bias?
The anchoring bias primes our brain into thinking that an initial anchor — the first piece of information we process — must be close to the correct answer we are looking for. It provides us with an initial value or starting point, and then we adjust our judgment from there. As a result, our changes to reach the final decision are not significant. This cognitive bias might lead us to make incorrect decisions, as we adapt any subsequent information based on our initial anchor, even if it is entirely irrelevant or irrational for our decision-making.
How does the anchoring bias influence my life?
The anchoring bias can benefit our decision-making, as it may help us to make reasonable estimates based on limited information. It also simplifies and speeds up the process and makes us feel more secure. However, it can also skew our judgment and prevent us from making significant changes to our plans, even if the situation calls for it. On top of that, it might lead to serious mistakes. For example, an individual may be more likely to purchase a car if it is placed alongside a more expensive model, or an underpaid worker might think he was offered a good salary if his initial expectations were lower.
What can I do about it?
Any decision-making process must rely on a broad scope of information, not only in one initial anchor. Otherwise, our ability to think logically and consider other fundamental aspects is completely neglected. It is critical to recognize and use the initial anchor only to ignite the thinking process and to gather information. This approach will lead to a realistic comparative judgment among multiple alternative options, which may differ from our original mindset based on the initial information we had.
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Sources
“The Anchoring Effect in Decision-Making with Visual Analytics”, by Isaac Cho, Ryan Wesslen, Alireza Karduni, Sashank Santhanam, Samira Shaikh and Wenwen Dou
- Anchoring is also relevant when the information is presented using visual analytics interfaces.
“An Anchoring and Adjustment Model of Purchase Quantity Decisions”, by Brian Wansink, Robert J. Kent and Stephen J. Hoch
- Purchasing apparently trivial goods such as groceries is also influenced by the anchors represented by brands and prices.
“First offers as anchors: the role of perspective-taking and negotiator focus”, by Adam D. Galinsky and Thomas Mussweiler
- Regardless of the sector and the transaction volume, the use of anchors could be critical in a negotiation strategy. Good knowledge of its impact and mechanisms can steer the negotiation to the desired result.
“The Last Word in Court—A Hidden Disadvantage for the Defense”, by Birte Englich, Thomas Mussweiler and Fritz Strack
- In trials, the defense’s sentencing recommendation is anchored on, and consequently assimilated toward, the preceding recommendation by the prosecution.
“The durability of anchoring effects”, by Thomas Mussweiler
- In some contexts, the magnitude of the anchoring effect was found to remain undiminished over relatively long periods of time.
“Incidental environmental anchors”, by Clayton R. Critcher and Thomas Gilovich
- Potential anchor values incidentally present in the environment can affect numerical estimates. For instance, estimates of an athlete’s performance were influenced by the number on his jersey, estimates of a sales product were influenced by its reference number, and a restaurant’s bill was estimated based on a number featured on its name.
“Be careful what you ask for: The effect of anchors on personal-injury damages awards”, by Mollie W. Marti and Roselle L. Wissler
- Award recommendations in the context of personal injury produce biased and unpredictable awards. The recommendations altered to some extent the upper and lower boundaries of awards but did not affect the perception of injury severity.