Fallacies and Cognitive Biases: Anchoring ~ by Ransom

 

This article is part of an ongoing series that began with Fallacies and Cognitive Biases.

The above picture is a detail from "50 Cognitive Biases to be aware of so you can be the very best version of you"

"We rely heavily on the first piece of information introduced when making decisions."

The blurb needs no elaboration.

This cognitive bias helps us make quick decisions in information-scarce environments.

If we start by knowing nothing, then learn something, that one piece of information is fantastically valuable compared to our original ignorance.  Additional information needs to be impressive to match the value difference of the first piece of information.

In an environment where decisions must be made quickly, consequences are contained, and information is closely clustered around reality, Anchoring is valuable.  In an environment where decisions are not urgent, consequences are complex & protracted, and information is unreliable, Anchoring can lead to very suboptimal decisions.

The petty decisions of our lives generally benefit from Anchoring but this cognitive bias has the potential to create big problems quickly.  Be aware that Anchoring can betray you & that marketeers use this to exploit you.

How do marketeers manipulate us with Anchoring?  They set a baseline that give the appearance of choice while steering us towards predetermined goals.  For example, have you noticed that buying choices will often include a very expensive option?  If you have the choice between a $20 meal and a $40 meal you will view the $40 with skepticism.  If a $100 meal is added to the options it will shift your perception of average price and suddenly the $40 meal looks reasonable while the $20 meal is suspiciously cheap.  The $100 meal isn't there to be bought, it is there to help sell the $40 meal.