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This week we’re tackling anchoring. Once you’re familiar with this one, you might just start to notice it everywhere! ⚓
What is Anchoring?
Anchoring is a cognitive bias that describes the tendency for an individual to rely too heavily on an initial piece of information offered (known as the "anchor") when making decisions.
So what does that mean in practice? There's one study I like in particular that illustrates the phenomenon of anchoring quite nicely.
The Gandhi Anchoring Study
Researchers split a bunch of people into two groups, and then asked them to estimate the age of the the famous activist Mahatma Gandhi. Each group was asked the question in a different way (or with a different anchor.)
The first group were asked: “Did Gandhi die before or after the age of 9?”. This groups average answer was 50 years old.
The second group were asked: “Did Gandhi die before or after the age of 140?”. This groups average answer was 67 years old.
Even though the anchor age numbers were outrageously high and low, the two groups still guessed significantly differently. The different ways the question was asked significantly affected their answers!
Anchoring And Pricing
Retailers love to use anchoring to affect a consumers reaction to their prices. See these two price tags below... Which of these appears to be a more appealing purchase?
Most of us will find it fairly easy to be objective about the price tag on the left, but less so with the price tag on the right. We get anchored by the $1000, and in comparison the $300 seems like a great deal!
Want to go deeper?
Reply to this email if you have any thoughts you want to share, otherwise wishing you a week filled with only helpful anchors dear Mental Modelers! 🙇