Anchoring bias
Introduction
Anchoring bias, also known as the anchoring effect, is a cognitive bias that influences decision-making and judgment. It occurs when individuals rely too heavily on an initial piece of information (the "anchor") to make subsequent judgments during decision making. The concept was first introduced by Amos Tversky and Daniel Kahneman in their 1974 paper, "Judgment under Uncertainty: Heuristics and Biases".
Concept and Definition
Anchoring bias is a type of cognitive bias that describes the common human tendency to rely too heavily, or "anchor," on one trait or piece of information when making decisions. Once the anchor is set, there is a bias toward that value. This can happen even when the anchor is arbitrary or irrelevant to the decision at hand.
Psychological Mechanisms
The anchoring effect is a result of several psychological mechanisms. One of these is confirmation bias, which is the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses. Another mechanism is the availability heuristic, which is a mental shortcut that relies on immediate examples that come to a person's mind when evaluating a specific topic, concept, method or decision.
Experimental Evidence
There is a substantial body of experimental evidence supporting the existence of the anchoring effect. In one of the most famous experiments demonstrating this bias, Tversky and Kahneman asked participants to estimate various quantities, stated in percentages (for example, the percentage of African countries in the United Nations). Before making these estimates, participants spun a wheel of fortune that was rigged to stop on either 10 or 65. Participants who spun a 10 guessed lower values (25% on average) than participants who spun a 65 (45% on average).
Real-world Implications
The anchoring effect has many real-world implications, particularly in the fields of economics and finance. For example, in negotiations, initial offers have a strong influence on the final outcome. People also tend to remain anchored to their initial beliefs and information, even when new information is presented that contradicts these beliefs.
Criticisms and Limitations
While the anchoring effect is a robust phenomenon, it is not without its critics. Some researchers argue that the effect is not as strong or as pervasive as Tversky and Kahneman suggest. Others argue that the anchoring effect is not a bias per se, but rather a heuristic that can lead to biased outcomes under certain conditions.