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Anchoring

3/5/19

Anchoring is a cognitive bias which refers to the way your mind makes associations when you are given information. The order in which you hear information has an impact on how you process subsequent information. Sometimes the initial information may not even be relevant to the subsequent data, for example in one study, participants watching a roulette wheel landing on 10, estimated the number of African countries in the UN much lower than those who witnessed a roulette wheel landing on 65.

Most studies show that it is extremely difficult for human brains to avoid the effect and even when participants are aware of it and expressly told to beware of it, they still fall into it.

The effect is particularly relevant when discussing financial transactions. It is how retail sales work, priming you to think you're getting a bargain from a reduction in that sofa from £699 to £499, when in reality the price was £699 for a very short time in anticipation of advertising it at the sale price. The retailer fully expected to sell it for a profit at £499 in the first place. We definitely don't use the anchoring technique in our bucket donation speech ;)

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