The anchoring and adjustment heuristic

The anchoring and adjusting heuristic is a mental shortcut we use when we need to make numerical estimates or judgments in situations of uncertainty.

It involves taking an initial number or value as a starting point (the "anchor") and then adjusting our estimate up or down based on that anchor.

The problem is that these adjustments are often insufficient, and the initial anchor exerts a disproportionate influence on the final judgment.

The Anchoring and Adjustment Process

When faced with a question to which we don't know the answer (e.g., estimating the percentage of African countries in the United Nations), we often start with a value that comes to mind arbitrarily or is proportionate to us, and then try to adjust that number until we arrive at an answer that seems reasonable.

The anchor may be completely irrelevant to the question at hand, but still influence our estimate.

For example, in one experiment, Participants were asked to spin a "wheel of fortune" that stopped on a random number (e.g., 10 or 65).

They were then asked whether the percentage of African countries in the UN was higher or lower than that number, and finally to give their estimate.

The Influence of the Irrelevant Anchor

The results of these kinds of experiments show that the initial number (the anchor), although arbitrary, has a significant impact on the final estimates.

Those participants whose wheel stopped on a low number (such as 10) tended to give lower estimates of the percentage of African countries, while those anchored on a high number (such as 65) gave significantly higher estimates.

This shows that even when we are aware that the anchor is random or irrelevant, we have a hard time letting go of its influence and adjusting our responding sufficiently.

Mechanisms and Consequences

Anchoring works because the initial value makes certain information more accessible in our minds.

If the anchor is high, we tend to think of reasons why the true answer might be high, and vice versa.

Furthermore, once we have an anchor, we often don't adjust enough because we're not sure how much we should move from that starting point.

This heuristic has implications for many real-life situations,from salary negotiations (where the first offer acts as an anchor) to purchasing decisions (where the original price influences the perception of a discount) or even in legal trials (where initial sentencing recommendations can influence a jury's final decision).

Being aware of the power of anchors can help us be more critical of the initial information we receive and strive to make more objective adjustments.