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    Anchoring Bias

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    sara collin
    The anchoring effect is a cognitive bias where providing an unrelated initial value, or anchor, influences people's judgments and decisions. In a study by Kahmenan and Tversky, participants spun a wheel landing on either 10 or 65 before estimating the percentage of African UN countries; those with higher anchors guessed significantly higher percentages. Companies take advantage of this effect through inflated prices they later discount to seem like a bargain. One way to reduce anchoring bias is to acknowledge it could influence decisions and delay judgments to consider the issue independently of any anchors.

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    Anchoring Bias

    Uploaded by

    sara collin
    36 views2 pages
    The anchoring effect is a cognitive bias where providing an unrelated initial value, or anchor, influences people's judgments and decisions. In a study by Kahmenan and Tversky, participants spun a wheel landing on either 10 or 65 before estimating the percentage of African UN countries; those with higher anchors guessed significantly higher percentages. Companies take advantage of this effect through inflated prices they later discount to seem like a bargain. One way to reduce anchoring bias is to acknowledge it could influence decisions and delay judgments to consider the issue independently of any anchors.

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    Anchoring bias

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    The anchoring effect is a cognitive bias where providing an unrelated initial value, or anchor, influences people's judgments and decisions. In a study by Kahmenan and Tversky, participants spun a wheel landing on either 10 or 65 before estimating the percentage of African UN countries; those with higher anchors guessed significantly higher percentages. Companies take advantage of this effect through inflated prices they later discount to seem like a bargain. One way to reduce anchoring bias is to acknowledge it could influence decisions and delay judgments to consider the issue independently of any anchors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    36 views2 pages

    Anchoring Bias

    Uploaded by

    sara collin
    The anchoring effect is a cognitive bias where providing an unrelated initial value, or anchor, influences people's judgments and decisions. In a study by Kahmenan and Tversky, participants spun a wheel landing on either 10 or 65 before estimating the percentage of African UN countries; those with higher anchors guessed significantly higher percentages. Companies take advantage of this effect through inflated prices they later discount to seem like a bargain. One way to reduce anchoring bias is to acknowledge it could influence decisions and delay judgments to consider the issue independently of any anchors.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    1) Define the term/ concept/ theory

    The Anchoring Effect is a cognitive bias that allows you to influence someone’s
    guess about a value for an unrelated item by giving them a random number. It’s
    when you rely too heavily on the first piece of information offered.
    2) Give an example of a study in which was shown

    3) Give a “real life example” of how this affects thinking


    Scams. Scams involving the value of certain objects/services.
    4) Explain how it can be avoided/reduced

    Podcast:

    Person 1: Vic
    Person 2: Signe
    Person 3: Mia

    Sara: Hey everyone! Welcome back to a quick summary of daily news in 15 minutes.
    We all bring a different piece of news and have 5 minutes to share with each other
    and you guys.

    Mia: Today’s my turn to start so to begin with. Did you hear about how companies
    and marketing teams are scamming people by playing with our brains as a marketing
    tool?

    Signe: Yeah! This is making me question a bunch of my decisions now. Makes me


    feel like my life is a lie.

    Vic: I read that it’s because they’re following and using a cognitive bias concept
    where the first piece of information someone plants into your head tricks you and
    changes your decisions. You end up relying too much on that first piece of
    information. It’s called the Anchoring bias.

    Signe: Wow, it’s scary to think about how someone can change our mind that easily.

    Mia: I read that article too and I believe that the Anchoring bias primarily uses
    numbers, especially in a case like this. Speaking of cases, there is a case created by
    Kahmenan and Tversky. They took some participants and made them spin a wheel
    they would either show 10 or 65. This would then be considered the anchor. Then
    they asked the participants to guess what percentage of countries in the UN were
    from Africa. The participants who landed on ten guessed an average of 25%,
    if they landed on 65 they guessed an average of 45% so it almost doubled!
    Simply because of the given number beforehand that doesn’t even relate to
    the question.

    Signe: You don't say, that's actually really interesting. Its unfortunate that it’s lead to
    so stupid scams.

    Vic: Speaking of scams, did you hear about the specific big company that they have
    been inflating their prices just to discount them back to normal price? Its honestly a
    great example of the effect. Because they show the inflated price, customers think
    the normal price is cheap, and are more likely to buy it even if they hadn't planned to,
    because of its normal price.

    Signe: People gotta watch out for that now. A way to prevent anchoring bias is to
    first, acknowledge the bias, take a moment and delay your decisions and drop your
    own anchor first.

    Sara: Well, that's all the time we got for todays daily quick summary, thank you so
    much for joining us and tune in tomorrow for another segment of daily news.

    - Scams, linking it to the Anchoring effect


    - Explaining what the anchoring effect is
    - A study showing that it is right -Kahmenan and Tversky
    Got participants to spin a wheel, would either land on 10 or 65
    This was the anchor. Asked participants to guess what percentage of
    countries in the UN were from Africa. The participants who landed on
    ten guessed an average of 25%, if they landed on 65 they had an
    average of 45% so it almost doubled! Simply because of the little given
    number beforehand that doesn’t even relate to the question.

    -
    - How we see it in every day life- prices saying 99 instead of 100?
    -

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