What is Anchoring Bias?
Anchoring bias is a cognitive bias that causes people to rely too heavily on the first piece of information they receive when making a decision. That information is their “anchor,” and it affects how they make decisions. Even when presented with additional information, people tend to give too much weight to the original anchor, leading to distortions in judgment and decision-making. Inaccurate adjustments from an anchor value can cause people to make erroneous final decisions and estimates.
For example, imagine you’re shopping for a new laptop. The first one you see costs $2,000, and you’re shocked at the price. This initial price is your anchor. Later, you come across another laptop that costs $1,500, which seems like a good deal compared to the $2,000 one. However, if you had seen the $1,500 laptop first, you might not have thought it was such a great deal because you wouldn’t have had the $2,000 price to compare to it.
Anchoring bias can have significant consequences, particularly when objective decision-making is critical, such as in negotiations or financial planning.
In the medical field, anchoring bias can have serious consequences. Doctors might rely heavily on initial symptoms rather than subsequent ones when making a diagnosis.
For instance, the COVID-19 pandemic has raised concerns about the impact of anchoring bias on patient diagnoses. A study conducted in 2020 found that doctors may be prone to anchoring bias when diagnosing COVID-19, potentially leading to failure to diagnose other conditions (Yousaf et al., 2020).
The dangers of anchoring bias are evident, as misdiagnosis can pose significant risks to patient health.
Learn more about Cognitive Biases.
Why Does Anchoring Bias Occur?
Psychologists Amos Tversky and Daniel Kahneman first discovered the phenomenon in the 1970s. They proposed that anchoring bias occurs because the anchor serves as a reference point for subsequent judgments. Essentially, people use the anchor as a starting point and then adjust their decisions from there rather than starting from scratch with each new piece of information.
In Tversky and Kahneman’s anchoring bias study, they asked participants to estimate the percentage of African countries that were members of the United Nations. However, before answering the question, participants were asked to spin a wheel rigged to land on either 10 or 65. Participants who landed on 10 gave estimates much lower than those who landed on 65, even though the number on the wheel was irrelevant to the actual percentage of countries in the UN.
Psychology theories suggest that anchoring bias occurs because it’s a shortcut our brains use to make quick decisions. Rather than carefully weighing all the available information, our brains latch onto the first piece of information we encounter to streamline the decision-making process.
Relevant Factors for Anchoring Bias
Mood, personality, and experience can influence individuals’ susceptibility to anchoring bias.
Research suggests that mood can impact anchoring bias, with individuals with a positive attitude being more likely to adjust correctly from the anchor than those in a negative mood (Englich & Soder, 2009). Similarly, personality traits such as openness to experience tend to mitigate the effects of anchoring bias. Individuals high in openness tend to be more receptive to new information and less likely to rely solely on the initial anchor (Caputo, 2014).
Experience can also play a role in anchoring bias. In one study, participants with expertise in a particular subject area were less susceptible to it when making estimates related to that domain (Welsh et al., 2014). Consequently, experience and knowledge can help individuals overcome the effects of anchoring bias.
Overall, while anchoring bias can lead to distorted judgments and decision-making in all individuals to some degree, factors such as mood, personality, and experience can influence the extent to which individuals are susceptible to this cognitive bias. By understanding these factors and working to mitigate their impact, individuals can avoid the pitfalls and make more objective decisions.
Amos Tversky and Daniel Kahneman, Judgment under Uncertainty: Heuristics and Biases, Science, New Series, Vol. 185, No. 4157. (Sep. 27, 1974), pp. 1124-1131.
Caputo, A. (2014). Relevant information, personality traits and anchoring effect. International Journal of Management and Decision Making, 13 (1), 62-76.
Englich, B., & Soder, K. (2009). Moody experts—How mood and expertise influence judgmental anchoring. Judgment and Decision making, 4 (1), 41.
Welsh, M. B., Delfabbro, P. H., Burns, N. R., & Begg, S. H. (2014). Individual differences in anchoring: Traits and experience. Learning and Individual Differences, 29, 131-140.
Yousaf, Z., Siddiqui, M. Y. A., Mushtaq, K., Feroz, S. E., Abou Kammar, S., Mohamedali, M. G. H., & Chaudhary, H. (2020). Avoiding anchoring bias in the times of the pandemic. Case Reports in Neurology, 12 (3), 359-364.