Thinking Fast and Slow. Chapter 11: Anchors

Following the schedule of our Reading Calendar

This chapter introduces us to the anchoring effect. Close to the priming effects we saw in former chapter, the idea is that someone drops a number -even randomly- before one has to be an estimate, that estimate will be influenced by the number one heard before. In the words of Kahneman: “If you are asked whether Ghandhi was more than 114 when he died you will end up with a much higher estimate of his age of death that you would if the anchoring question referred to death at 35. If you consider how much you should pay for a house, you will be influenced by the asking price.”

There are two different ways in which an anchoring effect may happen: Anchoring as adjustment and anchoring as priming effect.

In anchoring as adjustment: one starts from the anchoring number, decides whether it is too hight or too low and you adjust the final number moving from the anchor.

In anchoring as priming effect we can’t actually do an adjustment because the number is too high to be believable (was Gandhi more or less than 144 years old when he died?) But still we will produce a higher number than not having a previous anchoring. When we are asked whether Gandhi was older or younger than 144 years we can’t help but imagine a very old and venerable person, and so our calculation is misguided.

Kahneman present a series of well developed experiments to show the stability of the effect as well as measure it, using temperature, the height of redwoods, the price of houses or how much a person is going to give to a charity.

There is one experiment, however I found specially terrifying: how experienced judges were influenced by a roll of dice when having to decide the exact prison sentence they would give to a shoplifter. I imagine publicists, house sellers, lawyers and politicians reading this chapter and smiling wickedly…

Fortunately the chapter includes also indications on how to fight against an anchor when negotiating the price of a house, for example. The trick is to bring up system 2 to the rescue by looking for arguments against the anchor. “You should assume that any number that is on the table has had an anchoring effect on you,and if the stakes are high you should mobilize yourself (your system 2) to combat the effect”.

 

 

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