Beware The Anchor!

I'm going to assume that we all know what an anchor is. Nope, not the guy on TV, the original one. But just in case someone doesn't, I've added a picture below. An anchor makes sure that the ship it is attached to doesn't go floating off into the great, vast ocean. But anchoring doesn't just happen in naval contexts.

As Daniel Kahneman notes in his book Thinking, Fast and Slow, the brain can easily be influenced by giving it an anchor:

"It is an anchoring effect. It occurs when people consider a particular value for an unknown quantity before estimating that quantity. What happens is one of the most reliable and robust results of experimental psychology: the estimates stay close to the number that people considered - hence the image of an anchor." (p. 119)

So just as an example: if I asked you whether Mahatma Gandhi was more than 115 years old when he died and then asked you to give me an estimate of his age at death, you would end up giving me a much higher number than if I had asked you about him being more than 35 years at his death (unless of course you know that he was exactly 78 years old when he died... you nerd ;-)).

And the anchoring effect even works with professionals that shouldn't be influenced by it. In one experiment with real-estate agents that were asked to assess the value of a house, one half was shown an asking price that was substantially higher than the listed price, while the other half was shown an asking price that was substantially lower. They were also able to visit the house and study a booklet with comprehensive information on it, before being asked to name a reasonable buying price and the lowest price at which they would agree to sell it if they owned it. The anchoring effect was 41%, even though they all insisted that the listing price had had no effect on their judgment. When the same experiment was conducted with business school students with no real-estate experience the anchoring effect was only slightly higher (48%). The only real difference? The students admitted that they had been influenced by the listed asking price...

Anchoring, of course, is not always and not necessarily a bad thing:

"There are situations in which anchoring appears reasonable. After all, it is not surprising that people who are asked difficult questions clutch at straws, and the anchor is a plausible straw. If you know next to nothing about the trees of California and are asked whether a redwood can be taller than 1,200 feet, you might infer that this number is not too far from the truth. Somebody who knows the true height thought up that question, so the anchor may be a valuable hint. However, a key finding of anchoring research is that anchors that are obviously random can be just as effective as potentially informative anchors. [...] The conclusion is clear: anchors do not have their effects because people believe they are informative." (p. 125)

Which basically means that you can't really ever trust an anchor. It might be informative and helpful, but it might also lead you astray. Therefore Kahneman's last appeal in his chapter on anchoring is to be aware of it and fight against it:

"Anchoring effects are threatening in a similar way. You are always aware of the anchor and even pay attention to it, but you do not know how it guides and constrains your thinking, because you cannot imagine how you would have thought if the anchor had been different (or absent). However, you should assume that any number that is on the table has had an anchoring effect on you, and if the stakes are high you should mobilize yourself (your System 2) to combat the effect." (p. 128)

So what do you think? Have I gotten more or less than 100 reads on my most popular post (at the time of writing) "Who Still Needs Men?" What would be your estimate? ;-)