An Experimental Study on Social Anchoring

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: The anchoring-and-adjustment heuristic has been studied in numerous experimental settings and is increasingly drawn upon to explain systematically biased decisions in economic areas as diverse as auctions, real estate pricing, sports betting and forecasting. In these cases, anchors result from publicly observable and aggregated decisions of other market participants. However, experimental studies have neglected this social dimension by focusing on external, experimenter-provided anchors in purely individualistic settings. We present a novel experimental design with a socially derived anchor, monetary incentives for unbiased decisions and feedback on performance to more accurately implement market conditions. Terms of use: Documents inDespite these factors, we find robust effects for the social anchor, an increased bias for higher cognitive load, and only weak learning effects. Finally, a comparison to a neutral, external anchor shows that the social context increases the bias, which we ascribe to conformity pressure. Our results support the assumption that anchoring remains a valid explanation for systematically biased decisions within market contexts.

Behavioral Biases of Individual Investors: The Effect of Anchoring

“…These results support the notion of market conditions correcting irrational consequences of individual heuristics. Therefore, rationality-increasing teamwork as a ubiquitous form of decision-making in actual markets might be an additional filter for biased decisions previously overlooked in experimental studies (Meub and Till, 2014).…”

The evolution of behavioral economics

“…To provide a brief introduction, enterprises design and set anchor values for consumers to entice them to buy their products. When persuading consumers to purchase a particular product, sellers often influence consumers' price perception by anchoring a high reference price, which becomes an anchor value (Merb & Proeger, 2014). In most restaurant menus, different dishes are sorted according to the prices of products, from high to low (Yang & Chang, 2011).…”