Anchoring Effect Meaning
Anchoring occurs when a person bases decisions and opinions solely on the first few pieces of information encountered (known as “anchors”). The renown psychologists Daniel Kahneman and Amos Tversky first recognized anchoring as a cognitive bias in 1974.
Cognitive biases, such as the anchoring bias, pose a serious challenge to rational accounts of human cognition. …These systematic deviations from the tenets of logic and probability are known as cognitive biases. According to Tversky and Kahneman (1974), cognitive biases result from people’s use of fast but fallible cognitive strategies known as heuristics.
Princeton’s paper quoted above also has an amazing paragraph that needs to be inserted here. It confronts the rationality of the human mind.
The discovery of cognitive biases was influential because following the rules of logic and probability was assumed to be the essence of rational thinking. Evidence that people deviate from these rules brings human rationality into question. This doubt is shaking the foundations of economics, the social sciences, and rational models of cognition. If the human mind does not follow rational principles, then there is little hope that we will be able to able derive unifying laws of cognition from a basic set of axioms. Without the principles of rationality, there is little guidance for how to translate assumptions about cognitive processes into predictions about behavior and how to generalize from our data. But if people were systematically rational in some sense, then all of this would be possible, and creating artificial intelligence could go hand in hand with understanding how the mind works. Therefore, the question whether people are rational is fundamental to how we study the mind, to how we model it, and the implications of our theories for science and society.
There is a short, simple article by Academy 4SC that briefly explains how the anchoring bias works. It is just a two-minute read and gives a direct illustration of this bias as well as Kahneman and Tversky’s insights into why heuristic thinking can often lead us astray. Or you can just watch the video.
Take-away: There are over 200 listed cognitive biases and one should wonder how irrational we are. Rational thinking is serious business and should be the measure of mental maturity.