Anchoring

Anchoring (1) is a cognitive bias which refers to when a person’s decision making is negatively impacted by relying too much on a base piece of information. That is to say, when a person ‘anchors’ on a specific base fact which obscures judgement and goes onto use this base fact as a rationale for additional judgements, it may be considered anchoring. This term developed out of the school of psychophysics and was later used by Muzafer Sherif (2) to refer to a person’s attitude.

What follows is a fictional live scenario of anchoring effecting you;

You find yourself in a pawn shop looking for a guitar to buy. You stumble upon a guitar that you like and see that it is being sold for $200. The ‘anchor’ in your decision making is the price of the guitar. The price sets an arbitrary focal point which may serve as an influencer for all your future decisions. You haggle with the owner and after a volley of offers, he lets it go for $90. Now you have your guitar and you managed to pay only $90 out of the original $200. You’re feeling happy with your purchase, but… you can’t help but wondering if you’re being affected by a cognitive bias.

The answer is yes, yes you were being affected by a cognitive bias. Another term for anchoring is focalism. Focalism is when you believe spending $90 on a $20 product is a good idea because an ‘anchored’ piece of information has influenced you to think so. I’m going to use you in another example to show what anchoring looks like when the price has not yet been set.

You find yourself stopping at a garage-sale on your way home from buying a guitar. You look around and locate a brand new crock-pot that you really want. There’s no price on it, so you search for the owner. You find the owner within the minute and inform them that the crock-pot is not labeled. The price of $10 is established, and this becomes the anchoring point. You end up paying $8 for it and return home with your items.

The obscuring information may be identified as the price, being $10. Where the neighbor received the crock-pot for free and it held no investment to them, they arbitrary price of $10 was established for negotiation. Thus, the anchor is an arbitrary point which may be established at any moment during one’s decision making.

Anchoring may also be considered a psychological heuristic (3). This heuristic was originally theorized by Amos Tversky and Daniel Kahneman. They have a couple of interesting studies which support their idea.

This bias may be considered difficult to avoid. In ‘Explaining the enigmatic anchoring effect: Mechanisms of selective accessibility’ (1997), there is a report of students being given anchors which were obviously wrong. The result is that the anchors significantly influenced their decision making. In ‘A new look at anchoring effects: Basic anchoring and its antecedents’ (1996), a report is shown which describes two groups, one which does not know about the anchoring effect, and one which has been informed that this effect may influence them. Both groups were influenced by the anchor. The group which had been informed even did worse than the one which was not. ~

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It is important to remember that these ideas are not concrete. They are not certain. This bias, along with many others, has been meet with some criticism as to whether or not it even exists.

I provide the following definition for “anchoring”;
verb, to use a flawed piece of information as the basis for additional arguments.

I will propose this definition due to the fact that I’ve seen people do this before, and I believe it may be referred to appropriately as ‘anchoring’.

What do you think? Is anchoring even a thing?



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References;

(1) – https://en.wikipedia.org/wiki/Anchoring 

(2) – https://en.wikipedia.org/wiki/Muzafer_Sherif

(3) – https://en.wikipedia.org/wiki/Heuristics_in_judgment_and_decision-making

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