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[[Category:Cognitive biases]]
[[Category:Cognitive biases]]
[[Category:Decision making]]
[[Category:Prospect theory]]
[[Category:Prospect theory]]

Latest revision as of 15:16, October 13, 2012



Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily, or "anchor," on one trait or piece of information when making decisions.


During normal decision making, anchoring occurs when individuals overly rely on a specific piece of information to govern their thought-process. Once the anchor is set, there is a bias toward adjusting or interpreting other information to reflect the "anchored" information. Through this cognitive bias, the first information learned about a subject (or, more generally, information learned at an early age) can affect future decision making and information analysis.

For example, as a person looks to buy a used car, he or she may focus excessively on the odometer reading and model year of the car, and use those criteria as a basis for evaluating the value of the car, rather than considering how well the engine or the transmission is maintained.

Focusing effectEdit




Anchoring and adjustment heuristicEdit


File:Daniel KAHNEMAN.jpg

The anchoring and adjustment heuristic was first theorized by Amos Tversky and Daniel Kahneman. In one of their first studies, participants observed a roulette wheel that was predetermined to stop between the numbers 10 and 65. Half of the participants experienced the wheel stopping at 10 and half at 65. The participants were subsequently asked to guess the percentage of African nations that were members of the United Nations. Participants whose wheel stopped on 10, answered the question "Was it more or less than 10%?" by guessing low values (25% on average). In contrast, those participants whose wheel stopped at 65 answered the question with significantly higher value guesses than their counterparts (45% on average).[3] The pattern has held in other experiments for a wide variety of different subjects of estimation.


Anchoring in negotiationsEdit

Anchoring, when used in negotiations refers to the concept of setting a boundary to outline the basic constraints for a negotiation. Subsequently, the anchoring effect in negotiations is the phenomenon in which we set our estimation for the true value of the item at hand.[5] In addition to the groundbreaking experiment conducted by Tversky and Kahneman, multiple other studies have shown that “anchoring” has the ability to greatly influence the approximated value of an object.[6] For instance, although it is likely that negotiators are able to appraise an offer based on multiple points of interest, studies have shown that, in general, they tend to pick one aspect to focus on and from which to segue into their discussion. In this way, the concept of “anchoring” plays a strong role in developing an induced starting point from which they are then able to affect their counterparts offer. As shown by Tversky and Kahenman, the location of this point is largely influential in persuading the subconscious to define the value of the object within range of that point.

A key when negotiating using anchors is Kahneman’s concept of anchoring-and-adjusting, also known as the idea of an offer and a counteroffer. Often, during an anchoring-and-adjusting process, the initial offer of the anchor determines what adjustments must be made in order to create a counteroffer.[7] Typically, although adjustments will be made, they will still be unlikely to fully counteract the initial offer and therefore, it is necessary to create a counteroffer. The process of initial anchor and ensuing counteroffer, creates a balance between the two negotiating parties, in which each side may offer concessions in order to reach the most mutually beneficial solution. Interestingly however, multiple studies have shown that the final agreements are more strongly influenced by the initial anchor than they are by any concessions made following it.[8]

An example of the strength of anchoring in negotiations was tested in a study conducted by Northcraft and Neale. The purpose of the study was to measure the difference in the estimated value of a house between students and real-estate agents. In this experiment, both groups were shown a house and then given different listing prices. After making their offer, each group was then asked to discuss what factors influenced their decisions. In the follow-up interviews, (although the real-estate agents denied being influenced by the anchor) the results showed that both groups were equally influenced by the "anchor" of the listing price.[9]

A second, ongoing example of the power of anchoring has been conducted during the Strategic Negotiation Process Workshops. During the workshop, a group of participants is divided into two sections: buyers and sellers. Each side receives identical information concerning the other party that they are encouraged to read before going into a one-on-one negotiation. Following this exercise, both sides debrief about their experiences. The results of these negotiations have shown that what and where the participants anchored had a significant effect on their success in the negotiation. In fact, with the proper anchor, the participants were not only able to increase the size of the pie but they were also able to obtain a larger piece of it.[10]

As shown by the examples above, anchoring plays an important role in the result of a negotiation. When used improperly or not at all, the impact of the anchor is decreased; however, when used correctly, the power of a good anchor can be decidedly influential. This aside, no matter what technique is employed, anchoring in negotiations remains a vital piece in determining a negotiation outcome.

See alsoEdit


  2. Kahneman, Daniel, Alan B. Krueger, David Schkade, Norbert Schwarz, Arthur A. Stone (2006-06-30). Would you be happier if you were richer? A focusing illusion. Science 312 (5782): 1908–10.
  6. Orr, D. & Guthrie, C. (2005). “Anchoring, Information, Expertise, and Negotiation: New insights from meta-analysis”. Ohio St. J. Disp. Resol., 597, 21.
  8. Kristensen, H. & Garling, T. (1997). “The Effects of Anchor Points and Reference Points on Negotiation Processes and Outcomes.” Goteborg Psychological Reports, 2, 8:27.
  9. Northcraft, G. B., & Neale, M. A. (1987). Expert, amateurs, and real estate: An anchoring-and-adjustment perpective on property pricing decisions. Organizational Behavior and Human Decision Processes, 39, 228-241.
  • Del Missier, F., Ferrante, D., & Costantini, E. (2007). "Focusing effects in predecisional information acquisition". Acta Psychologica, 125, 155–174.


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