In some cases, we may be aware of the danger of acting on our expectations and attempt to adjust for them. Perhaps you have been in a situation where you are beginning a course with a new professor and you know that a good friend of yours does not like him. You may be thinking that you want to go beyond your negative expectation and prevent this knowledge from biasing your judgment. However, the accessibility of the initial information frequently prevents this adjustment from occurring—leading us to weight initial information too heavily and thereby insufficiently move our judgment away from it. This is called the problem of anchoring and adjustment.
Tversky and Kahneman (1974) asked some of the student participants in one of their studies of anchoring and adjustment to solve this multiplication problem quickly and without using a calculator:
1 × 2 × 3 × 4 × 5 × 6 × 7 × 8
They asked other participants to solve this problem:
8 × 7 × 6 × 5 × 4 × 3 × 2 × 1
They found that students who saw the first problem gave an estimated answer of about 512, whereas the students who saw the second problem estimated about 2,250. Tversky and Kahneman argued that the students couldn’t solve the whole problem in their head, so they did the first few multiplications and then used the outcome of this preliminary calculation as their starting point, or anchor. Then the participants used their starting estimate to find an answer that sounded plausible. In both cases, the estimates were too low relative to the true value of the product (which is 40,320)—but the first set of guesses were even lower because they started from a lower anchor.
Interestingly, the tendency to anchor on initial information seems to be sufficiently strong that in some cases, people will do so even when the anchor is clearly irrelevant to the task at
hand. For example, Ariely, Loewenstein, and Prelec (2003) asked students to bid on items in an auction after having noted the last two digits of their social security numbers. They then asked
the students to generate and write down a hypothetical price for each of the auction items, based on these numbers. If the last two digits were 11, then the bottle of wine, for example, was
priced at $11. If the two numbers were 88, the textbook was $88. After they wrote down this initial, arbitrary price, they then had to bid for the item. People with high numbers bid up to 346%
more than those with low ones! Ariely, reflecting further on these findings, concluded that the
Social security numbers were the anchor in this experiment only because we requested
them. We could have just as well asked for the current temperature or the manufacturer’s suggested retail price. Any question, in fact, would have created the anchor. Does that seem rational?
Of course not (2008, p. 26). A rather startling conclusion from the effect of arbitrary, irrelevant anchors on our judgments is that we will often grab hold of any available information to
guide our judgments, regardless of whether it is actually germane to the issue.
Of course, savvy marketers have long used the anchoring phenomenon to help them. You might not be surprised to hear that people are more likely to buy more products when they are listed as four for $1.00 than when they are listed as $0.25 each (leading people to anchor on the four and perhaps adjust only a bit away). And it is no accident that a car salesperson always starts negotiating with a high price and then works down. The salesperson is trying to get the consumer anchored on the high price, with the hope that it will have a big influence on the final sale value.