Anchoring and Adjustment Heuristic

Description

We tend to base estimates and decisions on known ‘anchors’ or familiar positions, with an adjustment relative to this start point. We are better at relative thinking than absolute thinking.

The Primacy Effect and anchoring may combine, for example if a list of possible sentences given to a jury, they will be anchored by the first option.

Research

Englich and colleagues found that even judges can be influenced by this. Some judges had to imagine a sentence being greater or less than one year, whilst others were asked whether the sentence would be more or less than three years. In later imaginary sentencing, the judges were clearly influenced by the earlier anchoring.

So What?

Using it

If a negotiation starts with one party suggesting a price or condition, then the other party is likely to base their counter-offer relative to this given anchor. So start a good way from your real position (but beware of over-doing this). When giving choices, put the ones you want them to choose at the beginning.

Defending

If the other person makes the first bid, do not assume that this is close to their final price.

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Anchoring and Adjustment Heuristic

Description

Research

Example

So What?

Using it

Defending

See also

References

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