Understanding Anchoring Bias in Decision-Making

Biases Why do we have biases? * → dependent on assumptions about the world but not always accurate * These assumptions are called heuristics * Heuristics = mental shortcuts for our brain as it is lazy to store everything in exact precise detail. * Heuristics can result in patterns of thinking and decision-making that are consistent, but inaccurate → These patterns of thought = cognitive biases. * *Some cognitive biases are not dependent on a heuristic – for example, the bias may be the result of an individual trying to protect self-esteem or trying to fit into a group. Anchoring bias * cognitive bias that causes us to rely heavily on the first piece of information we receive about a topic * when we are setting plans or estimating something, we interpret newer information from the reference point of our anchor instead of viewing and interpreting it fully objectivity * this can skew our judgement and prevent us from updating our plans or predictions as much as we should simply: * People tend to adjust their judgments from the initial anchor, but the adjustment is often insufficient. * Anchors can be completely arbitrary and unrelated to the decision at hand. (i.e. when asked to estimate the population of a country, people's estimates can be influenced by a randomly provided number, such as the result of rolling a dice. Even though the dice roll is irrelevant, it can still serve as an anchor and bias their estimates.) * Anchoring bias can vary depending on the context and the information presented. Different anchors can lead to different judgments. Study 1: Englich and Mussweller * Aimed to test whetherif the simple request for a certain length of a prison sentence would unduly influence the decision made by a judge. * Sample : 19 young trial judges (15 male and 4 female) – with an average age of 29.37 and with an average of 9.34 months of experience. * Read through the materials and form an opinion about the case * After 15 minutes they were given a questionnaire * Half of the participants were told that the prosecutor demanded a 34-month sentence; while the other half were told that he demanded a 2-month sentence. * They were then asked the following questions: 1. Do you think that the sentence was too low, adequate, or too high? 2. What sentence would you recommend? 3. How certain are you about your sentencing decision? (a scale of 1 – 9) 4. How realistic do you think this case is? (a scale of 1 – 9) * Participants with the high anchor of 34 months had a recommended average of a 28.7 month sentence * Participants with the low anchor of 2 months averaged a secnetence of 18.7 months Conclusion: * The significant difference between the length of the sentence showed that the anchor did indeed influence their decision as those with the low anchor recommended significantly lower sentences, in comparison to those with the high ancor of 34 months. Evaluation Sampling: * The sample consisted of 9 young trial judges (15 male and 4 female) – with an average age of 29.37 and with an average of 9.34 months of experience. This meant that not only was the sample more representative of males and how anchoring bias may affect males but also that the sample may have before hand had some experience in how to maintain objectivity when sentencing the accused. Since the results may be more representative of males it could suggest that males are more susceptible to cognitive bias(anchoring) Reliability: * The study lacks reliability as the average results for each group both have high standard deviation meaning the results varied greatly across the judges suggesting that the results would not be consistent if the study was repeated, this suggests anchoring bias effects some more greatly than others Link: The study showed that anchoring bias influences our decisions and judgement. Participants with the low anchor of 2 months recommended significantly lower sentences avcergaging 18.7 months whilst those with the high anchor recommended a high sentence averaging 28.7 months. This showed that receiving the information of the recommended sentece influenced their decision-making and judgement when recommending their own sentences, and therefore shows the effect of anchoring bias in thinking and decision making. Study 2: tversky and Kahneman * aimed to investigate the effect of anchoring bias and its impact on people's judgements and estimates * percedure: * They asked high school students to estimate the product of a mathematical equation within 5 seconds * One group was given the equation in ascending order(1x2x3x4x5x6x7x8)and the other in descending order(8x7x6x5x4x3x2x1) * After 5 seconds, they were asked for their estimates * the researchers analysed the median estimates provided by each group to compare the effects of different starting numbers on the final estimates * Findings: * the group that received the equation in ascending order provided a median estimate of 2250 * the group with descending order provided a median estimate of 512 * the correct answer was 40320 * the difference in estimates between the two groups indicated that the initial starting point point(anchor) influenced their judgements * Conclusions: * Anchoring bias occurs because people tend to rely healvily on the initial anchor when making estimates or judgements * the adjustments made form the anchor are often insufficient, leading to biased decision-making * the study demonstrated that even when the anchor arbitrary or irrelevant, it still has an significant impact on peoples judgement Evaluation: This study lacks ecological validity as the study took place in an artificial setting. The task lacked mundane realism as multiplying numbers together in that specific order and then estimating the size is not an everyday task. This means that the results of the study doesn't doesn't apply to all types of tasks and may differ for different individuals and how they approach tasks in real life situations. This means that the study is not an accurate explanation of anchoring bias as the type of task may affect the choices and decisions made and therefore anchoring bias needs to be students in a range of scenarios to see how the type of task affects whether or not an anchoring bias has an effect. There is also a risk of demand characteristics playing a role in the results of the study. Since the sample was high school students, some students may have had more maths knowledge and therefore could have used existing knowledge to answer the question instead of using anchoring biases. This means that the requests of the experiment may not be an explanation of the effect of anchoring bias, but instead a display of maths ability and previous knowledge. This means that anchoring bias relies on the idea that the person has zero previous knowledge and experience, and therefore have to rely on biases from information that they are given. Link: The study showed that anchors could infact influence the way that people judgame and make estimations. They found that the anchor for the group with ascending order of numbers had lower estimations as their first number was a low value(1) whilst they found that the group with descending order of numbers had higher estimates as their first value was higher(8). This not only showed that an anchor is the first piece of information received but also that the anchor then influences the participants' judgements as they make estimations based on / surrounding the anchor/ in relation to the anchor. Therefore showing the effect of anchoring bias in thinking and decision making. LAQ Theory: → Definitions → how it works → why is it important to study biases in thinking and decision-making Topic sentence 1: one way in which we can see the extent to which anchoring bias can influence decisions and judgments is through using experiments to replicate real-life situations such as court judgemnts → Study 1:Englich and mussweller * This study simulated a court situation showing how anchoring biases has broader more impactful implications in real life contexts * It also shows how the first piece of information we receive from someone can influence our decisions later on highlighting the need for objectivity when approaching sensitive or important decisions and judgements. → Study evaluation Topic sentence 2: Another way in which we can see how biases can affect our judgements is through how we make estimations. → Study 2: * From the study we find that personal relevance and emotional connection to certain events trigger the formation of flashbulb memories * This allows us to predict whether or not we remember events, and if we feel they are more significant and we are emotionally invested in them, that we will be more likely to form flashbulb memories of these moments * It also shows how the theory has applications in the simplest of scenarios such as school situations, allowing us to understand the need to think in structural and objective methods to create more accurate estimations and judgements about the correct answer/solutions to different problems. → study evaluation → Any additionally TEACUP Conclusion

Anchoring bias 
	   * cognitive bias that causes us to rely heavily on the first piece of information we receive about a topic
   * when we are setting plans or estimating something, we interpret newer information from the reference point of our anchor instead of viewing and interpreting it fully objectivity 
   * this can skew our judgement and prevent us from updating our plans or predictions as much as we should

simply:
   * People tend to adjust their judgments from the initial anchor, but the adjustment is often insufficient.
   * Anchors can be completely arbitrary and unrelated to the decision at hand. (i.e. when asked to estimate the population of a country, people's estimates can be influenced by a randomly provided number, such as the result of rolling a dice. Even though the dice roll is irrelevant, it can still serve as an anchor and bias their estimates.)
   * Anchoring bias can vary depending on the context and the information presented. Different anchors can lead to different judgments.
	Study 1: Englich and Mussweller
	   * Aimed to test whetherif the simple request for a certain length of a prison sentence would unduly influence the decision made by a judge.
   * Sample : 19 young trial judges (15 male and 4 female) – with an average age of 29.37 and with an average of 9.34 months of experience.
   * Read through the materials and form an opinion about the case
   * After 15 minutes they were given a questionnaire
   * Half of the participants were told that the prosecutor demanded a 34-month sentence; while the other half were told that he demanded a 2-month sentence.
   * They were then asked the following questions:
   1. Do you think that the sentence was too low, adequate, or too high?
   2. What sentence would you recommend?
   3. How certain are you about your sentencing decision? (a scale of 1 – 9)
   4. How realistic do you think this case is? (a scale of 1 – 9)
   * Participants with the high anchor of 34 months had a recommended average of  a 28.7 month sentence
   * Participants with the low anchor of 2 months averaged a secnetence of 18.7 months
Conclusion: 
   * The significant difference between the length of the sentence showed that the anchor did indeed influence their decision as those with the low anchor recommended significantly lower sentences, in comparison to those with the high ancor of 34 months.

Evaluation 
	Sampling: 
   * The sample consisted of 9 young trial judges (15 male and 4 female) – with an average age of 29.37 and with an average of 9.34 months of experience. This meant that not only was the sample more representative of males and how anchoring  bias may affect males but also that the sample may have before hand had some experience in how to maintain objectivity when sentencing the accused. Since the results may be more representative of males it could suggest that males are more susceptible to cognitive bias(anchoring)

Reliability:
   * The study lacks reliability as the average results for each group both have high standard deviation meaning the results varied greatly across the judges suggesting that the results would not be consistent if the study was repeated, this suggests anchoring bias effects some more greatly than others

Link: 
	The study showed that anchoring bias influences our decisions and judgement. Participants with the low anchor of 2 months recommended significantly lower sentences avcergaging 18.7 months whilst  those with the high anchor recommended a high sentence averaging 28.7 months. This showed that   receiving the information of the recommended sentece influenced their decision-making and judgement when recommending their own sentences, and therefore shows the effect of anchoring bias in thinking and decision making.
	Study 2: tversky and Kahneman
	   *  aimed to investigate the effect of anchoring bias and its impact on people's judgements and estimates
   * percedure:
   * They asked high school students to estimate the product of a mathematical equation within 5 seconds
   * One group was given the equation in ascending order(1x2x3x4x5x6x7x8)and the other in descending order(8x7x6x5x4x3x2x1)
   * After 5 seconds, they were asked for their estimates 
   * the researchers analysed the median estimates provided by each group to compare the effects of different starting numbers on the final estimates
   * Findings: 
   * the group that received the equation in ascending order provided a median estimate of 2250
   * the group with descending order provided a median estimate of 512
   * the correct answer was 40320
   * the difference in estimates between the two groups indicated that the initial starting point point(anchor) influenced their judgements
   * Conclusions:
   * Anchoring bias occurs because people tend to rely healvily on the initial anchor when making estimates or judgements
   * the adjustments made form the anchor are often insufficient, leading to biased decision-making
   * the study demonstrated that even when the anchor arbitrary or irrelevant, it still has an significant impact on peoples judgement

Evaluation: 
	This study lacks ecological validity as the study took place in an artificial setting. The task lacked mundane realism as multiplying numbers together in that specific order and then estimating the size is not an everyday task. This means that the results of the study doesn't doesn't apply to all types of tasks and may differ for different individuals and how they approach tasks in real life situations. This means that the study is not an accurate explanation of anchoring bias as the type of task may affect the choices and decisions made and therefore anchoring bias needs to be students in a range of scenarios to see how the type of task affects whether or not an anchoring bias has an effect.

There is also a risk of demand characteristics playing a role in the results of the study. Since the sample was high school students, some students may have had more maths knowledge and therefore could have used existing knowledge to answer the question instead of using anchoring biases. This means that the requests of the experiment may not be an explanation of the effect of anchoring bias, but instead a display of maths ability and previous knowledge. This means that anchoring bias relies on the idea that the person has zero previous knowledge and experience, and therefore have to rely on biases from information that they are given.

Link: 
	The study showed that anchors could infact influence the way that people judgame and make estimations. They found that the anchor for the group with ascending order of numbers had lower estimations as their first number was a low value(1) whilst they found that the group with descending order of numbers had higher estimates as their first value was higher(8). This not only showed that an anchor is the first piece of information received but also that the anchor then influences the participants' judgements as they make estimations based on / surrounding the anchor/ in relation to the anchor. Therefore showing the effect of anchoring bias in thinking and decision making.
	LAQ
	Theory: 
→ Definitions
→ how it works
→ why is it important to study biases in thinking and decision-making

Topic sentence 1: one way in which we can see the extent to which anchoring bias can influence decisions and judgments is through using experiments to replicate real-life situations such as court judgemnts 
→ Study 1:Englich and mussweller 
   * This study simulated a court situation showing how anchoring  biases has broader more impactful implications in real life contexts
   * It also shows how the first piece of information we receive from someone can influence our decisions later on highlighting the need for objectivity when approaching sensitive or important decisions and judgements.
→ Study evaluation

Topic sentence 2: Another way in which we can see how biases can affect our judgements is through how we make estimations. 
→ Study 2: 
   * From the study we find that personal relevance and emotional connection to certain events trigger the formation of flashbulb memories
   * This allows us to predict whether or not we remember events, and if we feel they are more significant and we are emotionally invested in them, that we will be more likely to form flashbulb memories of these moments
   * It also shows how the theory has applications in the simplest of scenarios such as school situations, allowing us to understand the need to think in structural and objective methods to create more accurate estimations and judgements about the correct answer/solutions to different problems.
→ study evaluation
→ Any additionally TEACUP

Conclusion

Transcript for:Understanding Anchoring Bias in Decision-Making

Transcript for:
Understanding Anchoring Bias in Decision-Making