The Epistemological Bias Of “Anchoring”

Jonah Lehrer (author of How We Decide and Proust Was a Neuroscientist) explains:

One of my favorite demonstrations of anchoring was done by a group of MIT economists led by Dan Ariely, as they conducted an auction with their business graduate students. (The study was later repeated with executives at the MIT Executive Education Program with similar results.) The items for sale included everything from a fancy bottle of French wine to a cordless keyboard to a box of chocolate truffles. The auction, however, came with a twist: Before the students could bid, they were asked to write down the last two digits of their social security number. Then, they were supposed to say whether or not they would be willing to pay that numerical amount for each of the products. For instance, if the last two digits of their social security number were 55, then they’d have to decide whether or not the bottle of wine or the cordless keyboard were worth $55. Finally, the students were instructed to write down the maximum amount they were willing to pay for the various items.

If people were perfectly rational, then writing down their social security numbers should have no effect on their bids. In other words, a student with a low valued social security number (like 10) should be willing to pay roughly the same price as someone with a high valued number (like 90). But that’s not what happened. Look, for instance, at the bidding for the cordless keyboard. Students with the highest social security numbers (80-99) made an average bid of $56. In contrast, the average bid made by students with the lowest numbers (1-20) was a paltry $16. A similar trend held for every single item. On average, students with higher numbers were willing to spend 300 percent more than those with low numbers.

And Lehrer thinks this phenomenon helps explain the slow reaction to the BP spill.

Your Thoughts?

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About Daniel Fincke

Dr. Daniel Fincke  has his PhD in philosophy from Fordham University and spent 11 years teaching in college classrooms. He wrote his dissertation on Ethics and the philosophy of Friedrich Nietzsche. On Camels With Hammers, the careful philosophy blog he writes for a popular audience, Dan argues for atheism and develops a humanistic ethical theory he calls “Empowerment Ethics”. Dan also teaches affordable, non-matriculated, video-conferencing philosophy classes on ethics, Nietzsche, historical philosophy, and philosophy for atheists that anyone around the world can sign up for. (You can learn more about Dan’s online classes here.) Dan is an APPA  (American Philosophical Practitioners Association) certified philosophical counselor who offers philosophical advice services to help people work through the philosophical aspects of their practical problems or to work out their views on philosophical issues. (You can read examples of Dan’s advice here.) Through his blogging, his online teaching, and his philosophical advice services each, Dan specializes in helping people who have recently left a religious tradition work out their constructive answers to questions of ethics, metaphysics, the meaning of life, etc. as part of their process of radical worldview change.