Anchoring is a cognitive bias that skews your judgments based on the first piece of information you see. Whether in negotiations, medicine, or everyday choices, this bias influences even the smartest minds.
The full story
Let’s do a simple psychological test: Do you think the average German car costs more than $90,000? That’s the question professor Michael Morris of Columbia University asked his class of MBA students in order to trick them using a phenomenon known as anchoring.
What is anchoring?
Anchoring is a cognitive bias that makes you rely too heavily on the first piece of information presented: the “anchor”. No matter how arbitrary it may seem, it pulls your thoughts, judgements, and decisions towards it.
Anchoring effect and impact
In negotiations, for example, priming the other party with an initial offer, sets an anchor that can heavily influence the final outcome. Even if both parties know that the initial offer is absurd, the final agreement often gravitates towards that first figure.
In medicine, studies show that doctors are often overly influenced by the initial information they receive, which can lead to screening errors, a false diagnosis, and the wrong treatment plan.
Even the smartest among us, who are trying to arrive at a logical conclusion, have an intuition that has already been swayed by the anchor, which pulls our thoughts towards a biased conclusion.
rigged wheel experiment
A fascinating experiment by Amos Tversky and Daniel Kahneman first introduced the idea in 1971. The two psychologists asked people to spin a rigged wheel with numbers ranging from 1 to 100. Afterward, participants were asked to estimate how many African countries were members of the United Nations. The result? Those who saw a high number on the spinning wheel gave much higher estimates than those who saw a low number. But does this work on Morris’ smart MBA students?
Morris’ experiment
Before Professor Morris ran his experiment, he separated his students into two groups. One group was asked if they thought that the average German car from last year cost more than $90,000, while the other was asked if it costs more than $30,000.
After doing this for many years, Professor Morris found that his students who were anchored by the $90,000 figure estimated the average price to be between $45,000 and $50,000, while those anchored by the $30,000 figure estimated it to be between $35,000 and $40,000. The anchors, regardless of the number, had pulled their judgments in that direction. Now, here’s the kicker.
the hidden influence
When Morris asked his students to explain how they arrived at their conclusions, they claimed that they used their knowledge to make a rational estimate. Only when the professor dug deeper did one group mention high-end brands like Mercedes, while the other thought of more affordable cars, like Volkswagen.
It is as if the pictures that arrive in the students’ heads when they are primed by the anchor, decide where they land with their estimates. “Intuition drives more than 90% of our thinking and behavior,” Morris concluded.
what do you think?
How did you answer? Were you influenced by our anchor at the beginning of the video to give estimates closer to $90,000, like the MBA students? Share your experiences with anchoring in the comments below!
Sources
- Iwai, K., Tetsuhara, K., Ogawa, E., & Kubota, M. (2018). Hidden diagnosis behind viral infection: the danger of anchoring bias. BMJ case reports, 2018, bcr2018226613.
- Ly, D. P., Shekelle, P. G., & Song, Z. (2023). Evidence for Anchoring Bias During Physician Decision-Making. JAMA internal medicine, 183(8), 818-823.
- Anchoring effect – Wikipedia.org
Dig deeper!
- Watch this video of Prof Kahneman explaining Anchoring Effect
- Read more about the conditions necessary for anchoring to occur
- Do this activity on EconEdLink on anchoring.
- Listen to this episode on Tribalism by Michael Morris
- Read this book on Tribalism by Prof. Stevan E. Hobfoll
Classroom activity
Objective:
Students will understand the concept of anchoring, explore its effects on decision-making, and analyze real-world applications and implications of this cognitive bias.
Materials Needed:
- Sprouts Video on Anchoring.
- Examples of anchoring in real-world scenarios (negotiations, medicine, marketing).
- Chart paper or whiteboards for group discussions.
- Markers and sticky notes for brainstorming.
Duration: 60 minutes
Steps:
1. Introduction and Context (10 minutes):
- Ask students: “Have you ever been influenced by a first impression or an initial number? For example, during a sale or negotiation?”Write their examples on the board.
- Introduce Anchoring: explain the concept of anchoring using the description provided. Emphasize how it affects judgments and decisions.
2. Group Activity: Experiment Recreation (20 minutes):
- Split students into two groups. Group A will be shown a high anchor (e.g., $90,000), and Group B a low anchor (e.g., $30,000).
- Present both groups with the same question: “What is the average price of a German car?”
- Collect their estimates on separate charts for comparison.
- Discuss how the two groups arrived at different conclusions despite using the same question. Highlight the role of the anchor.
3. Application and Discussion (20 minutes):
- Divide students into small groups and assign each group one of these topics:
- Anchoring in negotiations.
- Anchoring in advertising and marketing.
- Anchoring in medical decision-making.
- Groups discuss and answer:
- How does anchoring manifest in this context?
- What are the implications or potential consequences?
- Groups prepare a short summary to present.
- Each group presents their findings to the class.
4. Reflection and Solutions (10 minutes):
- Ask: “How can we avoid falling prey to anchoring in our daily lives?”
- Write practical solutions on the board (e.g., taking time to evaluate data, researching independently, being aware of biases).
- Ask students to write responses to:
- When have you experienced anchoring in your own life?
- What strategies can you use to counteract this bias?
Assessment:
- Evaluate student participation during group activities and discussions.
- Assess their ability to apply the concept of anchoring to real-world examples.
- Encourage thoughtful and evidence-based reflections.
This exercise combines hands-on experimentation, critical thinking, and practical applications to deepen understanding of anchoring and its effects.
Collaborators
- Script: Jonas Koblin and Ludovico Saint Amour di Chanaz, PhD
- Cartoon artist: Pascal Gaggelli
- Producer: Selina Bador
- Voice artist: Matt Abbott
- Coloring: Nalin
- Editing: Peera Lertsukittipongsa
- Sound Design: Miguel Ojeda
- Publishing: Vijyada Songrienchai
