What is the Anchoring Effect?
Discovered by researchers Tversky and Kahneman, the Anchoring Effect states that decisions are influenced by the first information we see. We anchor to this information without being consciously aware of its effects.
The Anchoring Effect in Action
In 2006, researcher Dan Ariely led an experiment at MIT. He held an auction with a twist. He showed students in his class random objects, like a bottle of wine or a textbook.
Ariely then asked students to write down a fake price for the item using the last two digits of their Social Security number as if it was the price (so if my Social was 123–45–6789, the price of a bottle of wine would be $89, for example). After students wrote down the fake price of each item, they bid on it in an auction.
The results? Students who had high Social Security numbers paid up to 346% more than those with low numbers, for the same items. Why? Because the first number students saw — even though it was completely unrelated — unconsciously influenced how much they decided to bid. The higher the Social Security number, the higher the bid.
As Professor Dan Ariely put it in his book “Predictably Irrational”:
“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.”
To read more about Anchoring click here to read the Choice Hacking article.
Below you'll find the Example Vault sorted by the Anchoring Effect - stay tuned, this Vault will be updated regularly.