"The anchoring effect is a psychological phenomenon in which an individual's judgements or decisions are influenced by a reference point or 'anchor' which can be completely irrelevant."
The tendency for people to use initial information (the anchor) as a reference point for making subsequent judgments or decisions.
Anchoring Bias: A cognitive bias that occurs when an individual bases their decision or judgment on a specific reference point, known as the anchor.
Adjustment Bias: A cognitive bias that occurs when an individual adjusts their estimate or prediction insufficiently to account for new information.
Contrast Effect: A cognitive bias that occurs when an individual's judgment or perception is influenced by the presence of nearby or previous stimuli.
Priming: A cognitive process that occurs when exposure to a stimulus affects subsequent behavior or responses.
Framing Effect: A cognitive bias that occurs when the way information is presented to an individual affects their judgment or decision-making.
Endowment Effect: A cognitive bias that occurs when an individual values an item more highly simply because they own it.
Sunk Cost Fallacy: A cognitive bias that occurs when an individual continues to make decisions based on previous investments, even if it is irrational to do so.
Loss Aversion: A cognitive bias that occurs when an individual places greater emphasis on avoiding losses than they do on achieving gains of the same magnitude.
Prospect Theory: A behavioral economic theory that describes how individuals make decisions under risk and uncertainty.
Nudge Theory: A behavioral economic approach that aims to subtly influence behavior and decision-making by altering the environment or context in which decisions are made.
Overconfidence Bias: A cognitive bias that occurs when an individual overestimates their abilities or the accuracy of their judgments.
Availability Bias: A cognitive bias that occurs when an individual judges the likelihood of an event based on how easily it can be retrieved from memory.
Confirmation Bias: A cognitive bias that occurs when an individual actively seeks out information that confirms their existing beliefs or attitudes.
Halo Effect: A cognitive bias that occurs when an individual's overall impression of a person or thing affects their judgments or evaluations of specific attributes or qualities.
Anchoring and Adjustment in Negotiation: A practical application of anchoring and adjustment principles in the context of negotiating parties.
Numerical Anchoring: This type of anchoring occurs when people use numbers as reference points when making decisions. People tend to rely heavily on the first number (anchor) they encounter, and then adjust their estimates based on that number.
Emotional Anchoring: Emotional anchoring happens when people are influenced by their emotional state when making decisions. For example, people who are in a sad mood may make different decisions than those who are in a happy mood.
Framing Anchoring: Framing Anchoring means that people's decisions can be strongly influenced by how the information is presented to them. For example, if a product is described as having a 90% success rate, people are more likely to buy it than if it is described as having a 10% failure rate.
"Both numeric and non-numeric anchoring have been reported in research."
"Once the value of the anchor is set, subsequent arguments, estimates, etc. made by an individual may change from what they would have otherwise been without the anchor."
"For example, an individual may be more likely to purchase a car if it is placed alongside a more expensive model (the anchor)."
"Prices discussed in negotiations that are lower than the anchor may seem reasonable, perhaps even cheap to the buyer, even if said prices are still relatively higher than the actual market value of the car."
"...when estimating the orbit of Mars, one might start with the Earth's orbit (365 days) and then adjust upward until they reach a value that seems reasonable (usually less than 687 days, the correct answer)."
"The original description of the anchoring effect came from psychophysics."
"When judging stimuli along a continuum, it was noticed that the first and last stimuli were used to compare the other stimuli (this is also referred to as 'end anchoring')."
"Sherif et al. conducted the 1958 article 'Assimilation and effects of anchoring stimuli on judgments'."
"The anchoring effect is a psychological phenomenon in which an individual's judgements or decisions are influenced by a reference point or 'anchor' which can be completely irrelevant."
"Both numeric and non-numeric anchoring have been reported in research."
"Prices discussed in negotiations that are lower than the anchor may seem reasonable, perhaps even cheap to the buyer."
"For example, when estimating the orbit of Mars..."
"Once the value of the anchor is set, subsequent arguments, estimates, etc. made by an individual may change from what they would have otherwise been without the anchor."
"The original description of the anchoring effect came from psychophysics."
"When judging stimuli along a continuum, it was noticed that the first and last stimuli were used to compare the other stimuli."
"'Assimilation and effects of anchoring stimuli on judgments'"
"This was applied to attitudes by Sherif et al. in their 1958 article 'Assimilation and effects of anchoring stimuli on judgments'."
"Prices discussed in negotiations that are lower than the anchor may seem reasonable, perhaps even cheap to the buyer."
"Both numeric and non-numeric anchoring have been reported in research."