In this episode we explore the heuristic known as the anchoring bias and just like physical anchors, they weigh us down, and influence our decisions. Anchoring bias occurs when we rely too heavily on pre-existing information or the first piece of information (the anchor) when making a decision.
This impairs our decision making and judgement in many ways. Sometimes inadvertently, and sometimes it's used against us, to try and influence our decision making.
Anchoring bias is one of the most robust effects in psychology. The bias also holds up even when the anchor is obtained by something completely random like rolling dice, and amazingly, even when researchers remind people that the anchor is irrelevant and should not be considered. We are that easy to influence!
Like all of the biases we explore these season, learning about them will help you realise when you are about to succumb to one! So for anchoring, next time you are offered an initial anchor, pause, realise it’s an anchor and take the time to dissect that anchor. Do some research and don’t respond straight away, as we know we don’t adjust enough from the initial anchor. Or even better, you provide the anchor to others, this is especially useful in negotiations!
Sadly, expertise and experience do not reduce the anchoring effect. To learn more about some of the research on how judges are susceptible learn more here.
When it comes to personal injury lawsuits, the more you ask the more you tend to get, the same is true in many other areas too, as everyone is susceptible to anchoring.
WHAT TO DO?
Despite the prevalence of anchoring, by listening to this episode you’ve taken the first step. The next step is to deliberately assess anchors you’re given. Look at the anchor and ask yourself why this isn’t accurate or fair.
Another option is to make a judgement call before you’ve been anchored. When you go to buy a car, have a price that you think is fair for the year, make and model. Anchoring works best when we don’t know the answer or haven’t formed our judgement yet.
IN OUR NEXT EPISODE...
In our next episode we explore the impact of availability bias.
For more episodes and information about decision making head over to our website: https://goodbetterright.com.au/podcast/
Tessa Mudge and Ken Smith