Today I would like to share some information about something
called “Anchoring Effect”.
Anchoring or focalism is a cognitive bias that describes the
common human tendency to rely too heavily on the first piece of information
offered (the "anchor") when making decisions.
In 1974, Amos Tversky and Daniel
Kahneman conducted a study on this matter. They asked people to estimate how
many African countries were part of the United Nations, but first they spun a
wheel of fortune. The wheel was painted with numbers from 0 to 100, but rigged
to always land on 10 or 65. When the arrow stopped spinning, they asked the
person in the experiment to say if they believed the percentage of countries
was higher or lower than the number on the wheel. Next, they asked people to
estimate what they thought was the actual percentage. They that found people who
landed on 10 in the first half of the experiment guessed around 25 percent of
Africa was part of the U.N. Those who landed on 65 said around 45 percent. The
subjects had been locked in place by a psychological phenomenon known as the
anchoring effect.
The trick here is no one really
knew the true answer. They had to guess, yet it didn’t feel like a guess. As
far as they knew, the wheel was a random number generator, but it produced
something concrete to work from. When they adjusted their estimates, they
couldn’t avoid the anchor.
“Anchoring Effect” –Another Experiment:
The anchoring effect can also
slip in unannounced. Drazen Prelec and Dan Ariely conducted an experiment at
MIT in 2006 where they had students bid on items in a bizarre auction. Ariely
explains in his book, Predictably Irrational, that the researchers would hold
up a bottle of wine, or a textbook, or a cordless trackball and then describe
in detail how awesome it was. Then, each student had to write down the last two
digits of their social security number as if it was the price of the item. If
the last two digits were 11, then the bottle of wine was priced at $11. If the
two numbers were 88, the cordless trackball was $88. After they wrote down the
pretend price, they bid. Sure enough, the anchoring effect scrambled their
ability to judge the value of the items. People with high social security
numbers paid up to 346 percent more than those with low numbers. People with
numbers from 80 to 99 paid on average $26 for the trackball, while those with
00 to 19 paid around $9.
The auction experimenters
conducted another study in which they asked people to listen to annoying sounds
for money. The researchers initially offered either 90 cents or 10 cents for a
blast of awful electronic screaming, and then they asked the subjects how much
would be the lowest possible price they would need to be paid to listen to the
sound again. People who were offered 10 cents said it would take about 33 cents
to continue. People offered 90 said it would take 73. They repeated the
experiment in other ways, but no matter how they messed with the sounds or the
payouts, those who were first offered a low payment consistently agreed to
lower amounts than those used to better wages. People who got more money at
first were unwilling to accept lower payments later.
