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Let's say I told you that joining ModelThinkers costs US$200. It doesn't — it actually costs US$60.
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- Delay and set your own anchor to interrupt anchoring bias.
Anchoring can function as a cognitive b ...
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The Anchoring Effect has been consistently replicated in a number of experiments and studies, with some variations. For example, there remains debate on the impacts of experience in a domain, and in the cognitive ability of participants — with studies in these areas returning mixed results.
That said, it is a largely accepted phenomenon.
Guess Gandhi's age.
In a 1997 experiment by Strack and Mussweiler, the two groups of participants to guess the age of Mahatma Gandhi when he died. Before the groups answered, they were anchored by preceding questions. The questions and results were as follows:
- Did Mahatma Gandhi die before or after the age of 9 years old? How old was he when he died? Average answer = 50 years.
- Did Mahatma Gandhi die before or after the age of 140 years old? How old was he when he died? Average answer = 67 years.
Anchoring in negotiations.
This excellent description by Harvard Law Professor Guhan Subramanian outlines his recommendations and experience in using and countering anchoring in negotiations. From defusing anchoring to justifying an offer that you want to become an anchor.
Anchoring and the law.
In one study, a prosecutor's extreme sentencing demand resulted in 27 to 60% longer prison sentences. Similarly, a journalist's question about sentencing resulted in 32% longer prison sentence. See this article for more examples in the legal context.
Anchoring and the breadmaker.
A company called Williams-Sonoma famously was struggling to sell there new bread maker which was priced at $279. Rather than change the product, or even lower the price, they did something surprising. They started selling a second breadmaker for $429. The result? Few people bought the expensive bread maker but the sales of the (now) cheaper one doubled. While it's hard to know the exact motivation here, it isn't a stretch to posit that the anchoring heuristic was at play — and the 'cheaper' bread maker suddenly seemed like a bargain.
The anchoring heuristic is a cognitive bias that has a range of implications.
Use the following examples of connected and complementary models to weave the anchoring heuristic into your broader latticework of mental models. Alternatively, discover your own connections by exploring the category list above.
Connected models:
- Fast and slow thinking: to understand broader cognitive biases.
- Availability heuristic: initial information tends to be part of the ‘most available’ information, though availability is broader.
Complementary models:
- EAST framework: incorporate anchoring in nudging strategies.
- BATNA & ZOPA: incorporating anchoring into negotiations.
- RICE score: consider the impact of anchoring in estimates.
- 4Ps of marketing: using anchoring in pricing strategy.
The anchoring heuristic is also known as anchoring bias, the anchoring effect and the anchoring and adjustment heuristic.
The anchoring and adjustment heuristic was first identified by Daniel Kahneman and Amos Tversky in 1974. The ‘adjustment’ refers to the tendency for subsequent judgements to change based on the initial anchor. We have shortened this heuristics name to the more familiar ‘anchoring heuristic’. See their book Thinking, Fast and Slow for more.
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