How Does the “Anchor Effect” Affect Decision Making Health?

“Truth is more capable of making healthy decisions amid uncertainty, contradiction and dangers.” Winston churchill

When people are trying to make a decision, they often need a criterion as a reference or starting point. Psychologists have discovered that people tend to evaluate new situations based on the first knowledge they experience / learn, and this has a serious impact on decision-making processes. Although this situation is explained in various terms in the psychology literature, it will be evaluated here within the framework of the concept of “anchoring effect”:

“People make predictions, opinions, and decisions based on starting points set to make the final decision,” said two well-known psychologists and behavioral scientists, Amos Tversky and Daniel Kahneman, in a joint paper published in 1974. “The initial value, that is, the reference points used in dealing with events, can be a feature within the event or situation in question, or the result of a partial calculation. In both cases, detections are typically inadequate and inaccurate. Tversky and Kahneman discovered in their tests that even random numbers can lead test participants to make false predictions. In one experiment, participants were asked to spin a wheel to choose a number between 0 and 100. Volunteers were asked to adjust this number up or down to indicate how many African countries are in the UN. The person returning a low number made lower predictions. In any case, it was this first issue that the participants took as basis in shaping their decisions. After all, what used to be mental anchor points were the first experiences of no logical value.

Decision Making Tendency Based on the Anchoring Effect Can Affect How Much You Want to Pay

For example, imagine you buy a new car. You have read from any site on the internet that the average price of the vehicle you are interested in is 27,000 dollars. When shopping at your local auto store, you automatically agree when the seller offers to sell the same vehicle to you for $ 26,500. After all, the price the seller is offering you is $ 500 less than you expected to pay. If we consider this case independently from the case in question, it is possible to find the same vehicle for only $ 24,000 in one of the car dealers across the city. This price is $ 2,500 less than what you paid in full and $ 3,000 less than on the website. After such a deal, you are bound to lament that you made such a quick decision and ignored better offers. Why do we jump so quickly on the first offer when this is the truth? This is actually a common mental bias error that is valid in all areas of life and people of all ages.

The Anchoring Effect Can Affect Your Salary Negotiations

Imagine negotiating a pay raise with your boss. You may be hesitant to make an initial offer, but research shows that being the first to place your cards on the table may actually be the best way forward. Whoever made the first bid, it puts you ahead in terms of advantage, as the anchoring effect will greatly shape the starting point of all other negotiations. This initial proposal helps create an acceptable set of countermeasures, and future proposals will use this first number as an anchor or focal point. Many studies have found that starting with a high salary demand actually results in higher salary offers.

The Anchoring Effect Can Affect Our Lives In Many Different Areas Besides Financial Earnings

The anchoring effect has an impact in many areas of our daily life beyond financial and purchasing decisions. If we give an example from its reflections in daily life:

How long do you think it will live? If your parents were both very long-lived, you can automatically expect to live a long life. Because of this anchor point, you can ignore that your parents lead a healthier and more active lifestyle that contributes to your parents’ longevity compared to the unhealthy foods you eat less and your sedentary life.

How much TV should your children watch each day? If you watched a lot of TV as a kid, you may find it more acceptable for your kids to be in front of the TV for hours each day.

What disease is responsible for a patient’s chronic pain? The anchoring effect can affect a physician’s ability to accurately diagnose a disease because initial impressions of the patient’s symptoms can form an anchor point that affects all subsequent evaluations.

The Factors Shaping the Anchoring Effect and Their Reflections

It is inevitable that this effect will affect us in daily life, but this effect appears in different ways when various factors are taken into account. If we look at these factors in general:

Psychological state: The mood when we experience the first experience that creates the anchor effect is very important. Studies have revealed that the anchor effect that occurs when depressed has a more permanent effect.

Experience: It has been observed that people who are educated and have intense life experience are more cautious against negative situations caused by the hoeing effect.

Character structure: Studies have shown that social people are less likely to suffer from the negative consequences of this effect than asocial people.

As you can see, the anchoring effect occurs as a powerful influence on the choices we make, from our purchasing behavior to how we shape our lives. So the next time you try to make an important decision, it is wise to think a little more about the possible impact of anchoring bias on our decisions. Do you pay enough attention to all available information and all possible alternatives, or do you base your preference on an existing port?