Anchoring effect
This was applied to attitudes by Sherif et al. in their 1958 article "Assimilation and effects of anchoring stimuli on judgments".
In another study by Tversky and Kahneman, participants were asked to estimate the percentage of African countries in the United Nations.
The anchoring effect was also found to be present in a study[8] in the Journal of Real Estate Research in relation to house prices.
The findings indicate that when investors start by making only a small stock purchase, they end up with less accumulated investments in the long run.
[11] A later study found that even when offered monetary incentives, most people are unable to effectively adjust from an anchor.
In short, the COS strategy is proposed to an individual by asking them to consider the possibilities the opposite of their perceptions and beliefs.
[13] Anchoring effects are also shown to remain adequately present given the accessibility of knowledge pertaining to the target.
This, in turn, suggests that despite a delay in judgement towards a target, the extent of anchoring effects have seen to remain unmitigated within a given time period.
[20][21] A possible cause would be the discriminatory fashion in which information is communicated, processed and aggregated based on each individual's anchored knowledge and belief.
[30] However, a distinction between individual and group-based anchor biases does exist, with groups tending to ignore or disregard external information due to the confidence in the joint decision-making process.
Utilized methods include the use of process accountability[37][38] and motivation through competition instead of cooperation[39] to reduce the influence of anchors within groups.
This is important in a business context, because it shows that humans are still susceptible to cognitive biases, even when using sophisticated technological systems.
[10] At least one group of researchers has argued that multiple causes are at play, and that what is called "anchoring" is actually several different effects.
[45] Factors that influence the capacity for judgmental correction, like alcohol intoxication and performing a taxing cognitive load (rehearsing a long string of digits in working memory) tend to increase anchoring effects.
[46] If people know the direction in which they should adjust, incentivizing accuracy also appears to reduce anchoring effects.
Proponents of alternative theories have criticized this model, claiming it is only applicable when the initial anchor is outside the range of acceptable answers.
[48] An alternate explanation regarding selective accessibility is derived from a theory called "confirmatory hypothesis testing".
Leading proponents of this theory consider it to be an alternate explanation in line with prior research on anchoring-and-adjusting and selective accessibility.
[52] A wide range of research has linked sad or depressed moods with more extensive and accurate evaluation of problems.
[55] Early research found that experts (those with high knowledge, experience, or expertise in some field) were more resistant to the anchoring effect.
A recent study on willingness to pay for consumer goods found that anchoring decreased in those with greater cognitive ability, though it did not disappear.
[62] In a poker-like experiment that included people of differing academic achievement and psychometric reasoning scoring, it has been found that anchoring is not related to education level.
[67] In addition to the initial research conducted by Tversky and Kahneman, multiple other studies have shown that anchoring can greatly influence the estimated value of an object.
[68] For instance, although negotiators can generally appraise an offer based on multiple characteristics, studies have shown that they tend to focus on only one aspect.
However, multiple studies have shown that initial offers have a stronger influence on the outcome of negotiations than subsequent counteroffers.
Northcraft and Neale conducted a study to measure the difference in the estimated value of a house between students and real-estate agents.
In their paper on anchoring bias[75] Kahneman and Tversky showed that people judgements could be skewed either higher or lower when presented with random numbers either high or low before their prediction.
The participants completed a personality test measuring cognitive processes as well as intelligence and individual determinants like extroversion and introversion.
All manipulations in the 1000 participant study shifted the median response towards the anchor and evidence against a systematic relationship.
With the decoy effect it generates, the anchor increases consumers’ willingness to pay for the set meals, or the mixed bundles.
