Oct 23 2009

# Whatever you anchor on, influences later decisions

Something I’ve long suspected when it comes to irrationality and folks that get so wrapped up in justifying their irrational worldviews is that, whatever your mind latches onto and “anchors” itself with first, heavily influences what decisions come afterward. This wholly explains people who have a single meme at the core of their black-and-white worldview and who build up lie and justification and apology into a form of armor to protect that kernel of their worldview against all scrutiny or critical analysis. A scientific study blogged at Rat Race Trap strongly backs this up:

Consider this experiment. A group of students were shown a series of products. There were a couple of bottles of wines, a couple of computer components, and a couple of unrelated products. Each student was given a sheet with the products listed on it. They were asked to write the last two digits of their social security number at the top of the page. Mine are 43 so I would have written “43” at the top of the page. Then they were asked to write that number in the form of dollars (e.g. \$43) next to each product listed. Then they were asked to write whether they would pay that amount (e.g \$43) for each product by writing yes or no next to each product. Finally they were asked write the maximum amount they would pay for each product. In this case they were actually bidding on the products and the top bidder would actually win the auction.

Now here is the wacky part of all this. The fact that the students contemplated a decision at a completely arbitrary price, the last two digits of their social security number, very heavily influenced what they were willing to pay for the product. The students denied that the anchor influenced them, but the data shows something totally different. Correlations ranged from 0.33 to 0.52. Those are extremely significant.

The students with social security numbers in the top 20% (80-99) placed bids from 216% to 346% higher than those with social security numbers in the bottom 20% (01-20). As an example, the top 20% bid an average of \$56 for a cordless keyboard while the bottom 20% bid an average of \$16!

It doesn’t matter what idea anchors you — you’ll revert to it or allow it to shape your future decisions whether the initial meme is completely arbitrary or deliberately crafted. Think about this in context of the religious folks I battle with daily, or the more recent animal rights activists that have as pernicious of dogmas to which they cling but could never justify or even delineate when directly asked to do so.

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##### Dan J

I’m not terribly fond of one part of the experiment:

Then they were asked to write whether they would pay that amount (e.g \$43) for each product by writing yes or no next to each product. Finally they were asked write the maximum amount they would pay for each product.

Asking people to assign a dollar value to a product they know almost nothing about is very disingenuous, in my opinion. I, for one, certainly wouldn’t purchase a bottle of wine or a computer component without knowing some details about it. Among those details would be the prevailing price. I don’t ever fall into the, “What is it worth to you?” trap.

I think that the anchor does little more in this case than to simply put the idea of a number into the person’s head (not unlike telling someone not to think of the number 27). I don’t think it has much to do with the person’s actual idea of the worth the products listed.

Then again, I’m attempting to approach it in a rational, analytical manner. What happens to the people who aren’t rational, and don’t analyze their decisions? I suppose they might become zealous christians or animal rights activists.

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##### Jason Thibeault

I think that’s actually advantageous in the experiment because the wholly irrationally derived numbers serve as anchors just as much as ones that are already in your head by knowing about, say, prices for wireless keyboards. In fact, I’d say knowing anything about market values for the objects would help to pollute the data. The second experiment, with paying the participants for certain jobs, would be more free of these potential data-skews.

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##### Dan J

Yeah, it’s a tough one. Some people will already have more information, and will throw the data points off as well.

How about using the “last two digits” thing to get an anchor for them, then have them pick a random number from 0 to 99. Let’s see how many of them choose permutations of their anchor, or whether the choices cluster around the anchor.