We’ve all heard of cases where two people receive very different sentences for committing identical crimes. One hidden bias that can influence these kinds of decisions is the Anchoring Effect.
Should your social security number influence how much you’d pay for a bottle of wine? Of course not! But behavioral economist Dan Ariely shows otherwise in a study where he auctioned off everyday items to students. Watch Dan’s explanation of the study here to learn how the anchoring bias can influence consumer decisions.
Often, the anchoring effect is discussed in the context of numbers: in our video, we saw how judges’ sentencing decisions could be influenced by even random numbers (like a roll of the dice). But we can anchor on ideas too. The podcast DDx explores what this can mean for doctors in their episode “Anchoring bias and the frequent flyer” featuring Dr. Gita Pensa.
Ariely, D., Loewenstein, G., & Prelec, D. (2003). “Coherent arbitrariness”: Stable demand curves without stable preferences. The Quarterly Journal of Economics, 118(1), 73-106.
English, B., & Mussweilier, T. (2001). Sentencing under uncertainty: Anchoring effects in the courtroom. Journal of Applied Social Psychology, 31(7), 1535-1551.
Englich, B., Mussweiler, T., & Strack, F. (2006). Playing dice with criminal sentences: The influence of irrelevant anchors on experts’ judicial decision-making. Personality and Social Psychology Bulletin, 32(2), 188-200.
Kaustia, M., Alho, E., & Puttonen, V. (2008). How much does expertise reduce behavioral biases? The case of anchoring effects in stock return estimates. Financial Management, 37(3), 391-412.
Mussweiler, T., Strack, F., & Pfeiffer, T. (2000). Overcoming the inevitable anchoring effect: Considering the opposite compensates for selective accessibility. Personality and Social Psychology Bulletin, 26(9), 1142-1150.
Northcraft, G. B., & Neale, M. A. (1987). Experts, amateurs, and real estate: An anchoring-and-adjustment perspective on property pricing decisions. Organizational Behavior and Human Decision Processes, 39(1), 84-97.
Saposnik, G., Redelmeier, D., Ruff, C. C., & Tobler, P. N. (2016). Cognitive biases associated with medical decisions: A systematic review. BMC Medical Informatics and Decision Making, 16(1), 1-14.
“What Sentence Would You Give?: Watch for the Anchoring Bias” was created and developed by Olivia Kang, Alex Sanchez, Kirsten Morehouse, Evan Younger, and Mahzarin Banaji. Support for Outsmarting Human Minds comes from Harvard University and PwC.
Narration by Olivia Kang.
Animation and Editing by Evan Younger.
Images by Olivia Kang and Evan Younger, and adapted via Unsplash.
Music by Miracles of Modern Science.
Video footage via MSNBC, WKBW-TV (ABC7 Buffalo), and WIVB-TV (News 4 Buffalo).