Thinking: Post#8 - Anchoring

Anchoring: When a seller puts a number on the table, that number has a powerful anchoring effect on a buyer by setting out the expectation. System 1 wants to believe the number—rationalize it—while System 2 needs to challenge the number. One experiment I’ve seen was when subjects were asked “Is the Mississippi River longer than 500 miles? If so, how long is it?” Estimates range from about 350 to 650 miles. If asked if the river is more or less than 1,000 miles, people give much higher estimates of its length. We tend to get anchored by initial figures.