I. The Story of My Friend’s Shopping
Last week, a friend excitedly shared her shopping “achievements” with me. She saw a trench coat in the mall. The style was novel and the fabric was of high quality. The price tag showed an original price of 3000 yuan, and it was on a 50% discount, so she only needed to pay 1500 yuan. My friend thought she had got a great bargain and bought it without hesitation. But a few days later, she saw an almost identical trench coat in another store, and the price was less than 800 yuan. Only then did my friend realize that she might have been misled by the “original price of 3000 yuan” she saw at first.
This phenomenon is called the “anchoring effect” in psychology. Simply put, when people make decisions, they are unconsciously influenced by the initial information they receive. Just like a ship being fixed by an anchor, this initial information becomes the benchmark for subsequent judgments. In the example of my friend buying the trench coat, the original price of 3000 yuan was like an “anchor”, making her think the price of 1500 yuan was a good deal and thus ignoring the need to compare prices in more places.
II. What is the Anchoring Effect
(1) Definition Explanation
The anchoring effect refers to the situation where when people need to make a quantitative estimate of an event, they will use certain specific values as starting values. These starting values, like anchors, restrict the estimated values. When making decisions, our thinking seems to be fixed by an invisible anchor. The information we first come into contact with will greatly influence our subsequent judgments and decisions.
(2) Display of the Classic Experiment
In 1974, Professor Daniel Kahneman, the Nobel laureate in economics, conducted a famous experiment. He recruited a group of high – school students and divided them into two groups, A and B. He asked them to quickly estimate the result of a multiplication formula within 5 seconds. Group A saw the formula 1×2×3×4×5×6×7×8, and Group B saw 8×7×6×5×4×3×2×1. The actual results of these two formulas are the same, both being 40320. But the experimental results were astonishing. The median of the estimated values of Group A students was 512, while the median of the estimated values of Group B students was as high as 2250, nearly 4 times the difference.
Why did such a difference occur? The reason is that the formula seen by Group A students started with smaller numbers. These small numbers were like a “low anchor”, anchoring their thinking in a lower numerical range. While the formula seen by Group B students started with larger numbers, and the “high anchor” made their estimated results higher. It can be seen that in uncertain situations, people’s decision – making judgments are significantly influenced by the initial information (i.e., the anchor value).
III. The Anchoring Effect in Life
(1) Consumption Scenarios
In daily life, the anchoring effect is everywhere, especially in consumption scenarios. I believe everyone has had a shopping experience like this: Entering a clothing store, a piece of clothing is priced at 800 yuan, and the promotional sign next to it says “80% off for a limited time, only 640 yuan”. Seeing this price, you may think you’ve got a great deal and buy it without hesitation. But in fact, the real value of this piece of clothing may be much lower than 640 yuan. Merchants are taking advantage of the anchoring effect, using the original price of 800 yuan as an “anchor” to make you think the price of 640 yuan is very cost – effective.
For another example, products on e – commerce platforms often display “original price XX yuan, promotional price XX yuan”. The original price is like a high anchor, making the promotional price seem very attractive. And some merchants will place a high – priced high – end product on the shelf. Although this product may be rarely purchased, it can serve as a price anchor point, making the products with relatively lower prices next to it seem to have a high cost – performance ratio.
(2) Work Scenarios
In the workplace, the anchoring effect can also have a significant impact on our decision – making. In business negotiations, the party that makes the first offer often has an advantage. Because this offer is like an “anchor” that will affect the other party’s subsequent negotiation strategies and decisions. If you are the seller and make a high initial offer, subsequent negotiations will be adjusted based on this higher price, and the final transaction price may also be relatively high. Conversely, if you are the buyer and make a low initial offer, the transaction price may be more in line with your expectations.
In project evaluation, the anchoring effect cannot be ignored either. Suppose a team is evaluating the budget of a project. Initially, someone proposes that it needs 1 million yuan. This number may become the “anchor” in everyone’s mind. Subsequent discussions and evaluations will unconsciously revolve around this number. Even if the project may actually only cost 800,000 yuan to complete, due to the influence of the initial anchor value of 1 million yuan, the final budget may exceed the actual needs.
IV. How the Anchoring Effect Affects Decision – Making Efficiency
(1) Positive Effects
Reasonable use of the anchoring effect can, to a certain extent, improve our decision – making efficiency. When we are faced with a vast amount of information and numerous choices, the anchoring effect can help us quickly narrow down the decision – making scope. When shopping for a mobile phone, there are a wide variety of mobile phone brands and models on the market, which is dazzling. If you know in advance that the average price of a certain brand of mobile phone is around 3000 yuan, this price will become an “anchor” in your mind. When choosing a mobile phone, you will unconsciously use this price as a benchmark and focus on mobile phones with prices around 3000 yuan, thus quickly screening out several mobile phones that meet your budget, greatly saving decision – making time and energy.
In situations where time is tight, the positive effect of the anchoring effect is even more significant. When participating in a time – limited 抢è´æ´»åŠ¨ï¼Œyou don’t have enough time to fully understand the detailed information of each product. At this time, the initial information such as the original price of the product or the purchase reviews of other customers will become your decision – making “anchor point”. If you see a product with an original price of 1000 yuan and now it only costs 500 yuan, you may quickly make a purchase decision because this price anchor point makes you feel that you’ve got a great bargain.
(2) Negative Effects
However, if misled by inappropriate anchor points, the anchoring effect can also have a negative impact on decision – making efficiency. We may over – rely on the initial information and ignore other important factors, resulting in decisions deviating from the optimal solution. When investing in stocks, many investors are often influenced by the initial price of the stock. If the issue price of a stock is 50 yuan, investors may take 50 yuan as an important anchor point. When the stock price rises to 60 yuan, they may think the stock has risen too high and choose to sell. But in fact, the fundamentals of the stock are good, and it has great potential for growth. The subsequent price may continue to climb to 100 yuan or even higher. Due to being misled by the initial issue price anchor point, investors sell the stock too early and miss the opportunity to obtain higher returns.
In the recruitment process, the anchoring effect may also lead to wrong decisions by interviewers. If the interviewer has a very good impression of the first candidate during the interview, the performance of this candidate will become a “high anchor”. When interviewing other candidates later, the interviewer may unconsciously measure them against the standard of the first candidate and be too critical of other candidates, thus missing some equally excellent but different – styled talents. Conversely, if the first candidate performs poorly, it may become a “low anchor”, causing the interviewer to over – evaluate subsequent candidates and reducing the quality of recruitment.
V. Ways to Master the Anchoring Effect in 5 Minutes
(1) Identify Anchor Points
To master the anchoring effect, the first step is to learn to identify anchor points. When facing various information, we should maintain a keen sense of observation and think about which information may become an anchor point affecting our decision – making. When buying a property, the high – priced properties initially introduced by the real – estate agent are likely to be anchor points, which will affect your judgment of the prices of subsequent properties. When you see the promotion of a mobile phone online, emphasizing that the original price is 3000 yuan and the current discounted price is 2500 yuan, the original price of 3000 yuan is an anchor point, making you feel that you’ve got a good deal. Therefore, before making a decision, ask yourself more often: Will this information become the benchmark for my judgment?
(2) Think from Multiple Perspectives
To avoid being bound by a single anchor point, we should learn to think about problems from multiple perspectives. When considering whether to buy a newly launched electronic product, don’t be immediately attracted just because of the advantages of the product promoted by the merchant (such as high performance, new functions, etc.). Try to analyze it from other perspectives, such as the cost – performance ratio of the product, whether it meets your actual needs, and the comparison of prices and performance of similar products on the market. At work, when the team is discussing a project plan, don’t be influenced by the first proposed plan. Encourage team members to put forward suggestions from different perspectives and comprehensively evaluate the advantages and disadvantages of each plan. Through thinking from multiple perspectives, we can break the limitation of the initial anchor point and make more comprehensive and rational decisions.
(3) Collect Information
Extensively collecting information is an effective way to weaken the influence of the initial anchor point. When buying a car, don’t just listen to the introduction of the 4S – store salesperson. Also, consult relevant car evaluation reports, user reviews, understand the price fluctuations of different models in the market, as well as the car’s maintenance costs, repair records, and other information. Only by mastering enough information can we have a more accurate understanding of the product, thereby reducing the decision – making deviation caused by the initial anchor point (such as the price and configuration of the model recommended by the salesperson). In the investment field, before deciding to invest in a certain stock, investors need to conduct in – depth research on the company’s financial situation, industry prospects, competitors, etc. They cannot make an investment decision just based on the current price of the stock or the recommendation of others. By collecting comprehensive information, we can provide a more solid basis for decision – making and make decisions more scientifically and rationally.
VI. Practical Strategies for Improving Decision – Making Efficiency
(1) Set Reasonable Anchor Points
Before making a decision, we can actively set reasonable anchor points with reference value. When formulating the annual sales target, don’t just determine it based on the previous year’s sales volume. Also, consider factors such as market trends, industry growth rates, and the company’s new product plans. If the market is on the rise as a whole, the industry growth rate is 10%, and the company is about to launch several competitive new products, then when setting the sales target, we can take the previous year’s sales volume plus a certain growth rate (such as 15%) as the anchor point, and formulate a detailed sales plan and strategy based on this. Such a set anchor point is more reasonable and can guide us to move towards a more challenging and feasible goal, improving the efficiency and quality of decision – making.
(2) Complementary Team Decision – Making
In team decision – making, team members should complement each other to avoid the collective falling into the anchoring trap. Due to differences in backgrounds, experiences, and ways of thinking, team members may have different views and judgments on the same issue. When discussing a project plan, some members may pay more attention to cost control, while others may focus more on innovation and market competitiveness. Through full communication and exchange, team members can share their respective viewpoints and insights, breaking the limitation of a single anchor point. When someone proposes a preliminary plan, other members can analyze and question it from different perspectives, such as the feasibility of the plan, potential risks, and expected returns. In this way, the team can consider various factors comprehensively, make more comprehensive and objective decisions, and improve decision – making efficiency.
Conclusion
The anchoring effect is like a double – edged sword. It can help us make decisions quickly and improve efficiency, but it can also mislead us and lead to decision – making mistakes. By understanding the principles, impacts, and coping methods of the anchoring effect, we can be more proficient in the decision – making process and make choices that are more in line with our own interests.
From today on, when you see a label of “original price XX yuan, current price XX yuan” while shopping, be more cautious. When facing various decisions at work, learn to actively set reasonable anchor points and encourage team members to think from multiple perspectives. I believe that as long as we are good at using the anchoring effect, we can continuously improve our decision – making efficiency and make our lives and work more smooth.
Have you also encountered situations affected by the anchoring effect in your life? Welcome to share your experiences in the comment section. Let’s discuss how to deal with it skillfully.
