Anchoring and Adjustment
An initial value can pull a numerical estimate toward it. When people generate their own starting point, they may adjust too little; externally supplied anchors can also influence estimates by making compatible information easier to retrieve.
THE IDEA
Anchoring and Adjustment
The anchoring and adjustment heuristic describes the tendency to rely heavily on an initial piece of information (the “anchor”) when forming a judgment. One possible process is to adjust away from that anchor but stop too soon, leaving the estimate biased toward the initial value. Early investigations examined whether this process is conscious and deliberate, or whether it operates through different mechanisms depending on how the anchor is generated.
Study 1: Verbal Protocols of Self-Generated vs. Provided Anchors
An initial exploration asked participants to verbalize their thoughts while answering questions that involved either self-generated anchors (where they produced their own starting point) or experimenter-provided anchors (where the anchor was given to them). The researchers predicted that participants would describe a process of anchoring and adjustment only when anchors were self-generated. In these cases, verbal reports were expected to begin with a reference to the anchor value, followed by a description of adjusting away from it—for example, “The United States declared its independence in 1776, and it probably took a few years to elect a president, so Washington was elected in … 1779.” In contrast, when anchors were provided by the experimenter, little or no mention of either the anchor or an adjustment process was expected. The observed pattern aligned with these predictions and is consistent with the selective accessibility account, which proposes that standard anchoring effects (with externally supplied anchors) are driven by increased accessibility of anchor-consistent information rather than by deliberate adjustment. Thus, the explicit adjustment mechanism appears primarily when people generate their own anchors.
Study 4: Anchoring and Adjustment in Academic Estimates
If people evaluate pairs of majors by anchoring on one component and adjusting, then a prior evaluation of one major should serve as an anchor. Specifically, participants who had previously estimated the higher-frequency member of a pair should give higher frequency estimates for the pair than participants who had previously estimated the lower-frequency member. Additionally, in the absence of a prior estimate, people might naturally choose the larger of the two majors as an anchor because it is closer to the required estimate.
To test these ideas, 81 participants were randomly divided into three groups and asked to estimate the number of students in 12 pairs of academic majors. Before evaluating the pairs, each group estimated a different set of 8 single majors. For each pair of majors, one group had previously estimated the high (more popular) major, another group had estimated the low (less popular) major, and a third group had estimated neither component. The order of presentation was randomized.
If anchoring and adjustment occurs, estimates in the high condition should exceed those in the low condition. Moreover, the neutral condition should resemble the high condition because, without a prior anchor, participants spontaneously anchor on the larger major. The results confirmed both predictions. The mean estimate for a pair was 251 students in the high condition, 202 in the low condition (a significant difference, t = 3.50, p < .001). The neutral condition mean of 237 was significantly higher than the low condition mean (t = 1.96, p = .05) but not significantly lower than the high condition mean (t = 0.70, ns). This pattern supports the proposed anchoring-and-adjustment account. The neutral estimates are also consistent with participants starting from the larger major, although the group averages alone do not reveal every participant’s reasoning.
When to use it
In pricing negotiations, the first offer often serves as an anchor that influences the final price.
In performance evaluations, a prior rating can anchor subsequent ratings.
In medical diagnosis, an initial suspicion may anchor a physician's thinking.
In salary negotiations, a job candidate's previous salary can serve as an anchor.
Negotiating prices or salaries where the first number proposed often sets the tone for the final agreement.
Making financial forecasts or project estimates, where the initial assumption can strongly bias subsequent adjustments.
Estimating durations or costs of new projects by anchoring on similar past projects, potentially overlooking key differences.
Evaluating legal arguments, where the initial suggested sentence or damage award can significantly influence the ultimate judgment.
FROM THEORY TO EVERYDAY LIFE
In practice
Self-generated anchor example
When asked when George Washington was elected president, a participant might start from the known year of independence (1776) and adjust forward a few years, arriving at the mistaken estimate of 1779.
Experimenter-provided anchor example
In the standard anchoring paradigm, participants are given a numeric anchor (e.g., 500 miles for the Mississippi River) and then asked to estimate the actual length. The anchor influences the estimate, but participants typically do not mention the anchor or an adjustment process in their verbal reports.
Anchoring Bias in Major Estimates
In Study 4, participants estimated student populations for pairs of majors after separately estimating the population of either the popular (high anchor) or unpopular (low anchor) single major. The mean estimates for the pair were 251 (high anchor condition), 237 (neutral), and 202 (low anchor condition), a pattern consistent with insufficient adjustment from a previously estimated component.
A MOMENT TO REFLECT
Put it to work.
How might self-generated anchors differ from externally provided anchors in a negotiation setting?
When making a numerical estimate, are you aware of any anchor you might be using?
Can you think of a situation where an anchor was provided to you (e.g., a suggested retail price) and it influenced your judgment without you realizing it?
How could the anchoring effect impact salary negotiations, and what strategy would you use to counter it?
Think of a time you estimated a project timeline. Did an initial rough estimate anchor your final prediction, even when new information suggested it was off?
In marketing, how might businesses use the anchoring effect to make a product seem more affordable?
References
- Strack & Mussweiler, 1997 — Strack and Mussweiler (1997)
CONTINUE THE CONVERSATION
Source texts
- Heuristics and Biases The Psychology of Intuitive Judgment (Thomas Gilovich, Dale Griffin, Daniel Kahneman)
- Heuristics and Biases The Psychology of Intuitive Judgment (Thomas Gilovich, Dale Griffin, Daniel Kahneman)