Behavioral economics has been attracting attention recently in the fields of marketing and sales, and one aspect of it that is said to have particularly high synergy is called the "anchoring effect."
In this article, we will explain the meaning, origins, and characteristics of the anchoring effect, which is difficult to understand at first glance, and introduce how it can be used in corporate marketing and sales activities.
The meaning and origin of anchoring
"Anchoring" refers to the psychological phenomenon in which finland business email list a person's judgment is heavily influenced by the first piece of information they receive (the anchor).
Anchor means "anchor" in English. Just as a ship anchors and remains on the water in a certain area, the nature of the human brain is such that the first information we obtain becomes a standard like an anchor, and it inevitably influences our subsequent judgments.
Etymology:
Anchor
Anchoring = Dropping an anchor and mooring a ship
For example, if you see a message saying "Normally 10,000 yen, but for these three days only, we are offering it for 5,000 yen!", 5,000 yen will seem very cheap to you. This is because the initial information that you get, that is 10,000 yen, becomes an "anchor."
Anchoring Examples
In both everyday life and business situations, our judgments are greatly influenced by what our anchors are. In many cases, anchors are numerical information, but they can also be semantic information. It has also been shown that in the absence of external stimuli, self-generated anchoring occurs due to the individual's own knowledge.
What is the anchoring effect?
Anchoring Definition (HubSpot)
(Source: HubSpot )
The anchoring effect is also called " anchoring bias " and is one of the "cognitive biases." Cognitive bias is a psychological phenomenon in which humans make irrational judgments when judging things due to preconceptions based on intuition or previous experiences.
This has been studied in the fields of cognitive psychology and social psychology, and is said to be a mistake that humans are prone to make due to the nature of their brains.
Anchoring effect experiments
The term "anchoring" was first coined by psychophysicists Muzafar Sherif, Daniel Taub, and Carl Hovland.
Experiment on the effect of anchor values on forecast values
In their 1958 study, subjects were asked to predict the weight of an object. They first investigated whether a number called an "anchor" would bring the predicted weight closer to the target value.
The anchoring effect has continued to be studied, and in 1974, Amos Tversky and Daniel Kahneman, leading researchers in cognitive biases, published a paper called " Judgment under Uncertainty: Heuristics and Biases ."
This research involved dividing a group of high school students into two groups, and having Group A answer the question "1 x 2 x 3 x 4 x 5 x 6 x 7 x 8 =?", and Group B answer the question "8 x 7 x 6 x 5 x 4 x 3 x 2 x 1 =?", each in five seconds.
If students take their time to calculate, the answer to both problems is "40320." However, since there are only five seconds to calculate, most students have no choice but to "guess" the answer unless they are very fast at mental arithmetic. This is the point of this research.
As a result, the average guess for Group A was "512," while the average guess for Group B was "2250." Aside from the fact that both were incorrect, there was a big difference between their answers. Why?
Anchoring experiment results
(Source: Nielsen Norman Group )
This research strengthened Tversky and Kahneman's hypothesis that people make judgments that are heavily influenced by the initial information they are given, even if that information is incorrect.
In other words, the first group A had small anchor numbers (1, 2, 3...) and gave small guesses, whereas group B had larger anchor numbers (8, 7, 6...) and gave larger guesses.
Perception of volume and the anchoring effect
American behavioral economists Elder Shafir and Robin Ruboff conducted experiments on anchoring to physical stimuli whose exact numerical values are difficult to determine, such as the length, weight, and loudness of an object.
In both experiments, people who estimated the same value based on a relatively small physical anchor predicted a lower estimate than people who estimated based on a relatively large anchor. As in the previous experiment on numerical prediction, people predicted values closer to the anchor. This suggests that physical stimuli can also be anchors that influence subsequent judgments.
Differences in the anchoring effects of "numerical information" and "semantic information"
A study by Seijo University in Japan compared the strength of the anchoring effect when numbers are presented as anchors and when only semantic information is presented without numbers.
The results showed that the strength of the anchoring effect was minimal when only semantic information was presented compared to when numbers were presented. This shows that numerical information plays a more important role in the anchoring effect. (Reference: CiNii (NII Academic Information Navigator [CiNy] )
Anchoring effect in business situations
The anchoring effect also has a significant impact in business negotiations.
