Anchoring

Availability heuristic

People judge the frequency of a class or probability of an event by how easily examples can be brought to mind.

Availability definition

The ease with which instances or occurrences can be recalled from memory.

Availability heuristic core idea

Ease of recall is used as a shortcut to estimate probability or frequency.

Driver of availability: number of recalled events

The more examples people can recall, the more common they believe something is.

Driver of availability: recency

Events that happened recently come to mind more easily and feel more likely.

Driver of availability: imaginability

If an event is easy to imagine, people judge it as more likely.

Availability example: comedians from Canada

People estimate how many comedians are Canadian based on how easily they can recall examples.

Availability example: shark attack vs cow attack

People believe shark attacks are more likely because they are vivid and memorable even though cow attacks are actually more common.

Drivers of availability: fluency

The ease with which information can be processed can influence perceived frequency or likelihood.

Processing fluency

The subjective experience of how easy or difficult information is to think about or understand.

Pronounceability example in fluency

Names or words that are easier to pronounce feel more familiar or likely.

Stock ticker pronounceability example

Stock tickers like TAX seem easier to process than TXY and therefore seem more favorable.

Fluency and stock performance perception

People judge stocks with easier-to-pronounce tickers more positively.

Fuzzy Font Study concept

Difficulty processing information can influence decisions.

Legibility equals fluency

Text that is easy to read is processed more fluently.

Fuzzy Font Study result

Hard-to-read fonts caused people to defer decisions between products more often.

Choice deferral in fuzzy font study

Participants delayed making a choice when product information was difficult to read.

Warning effect in fuzzy font study

If participants were warned about the hard-to-read font beforehand, the effect disappeared.

Explanation for fuzzy font results

Processing difficulty made the choice itself feel harder.

Ease of retrieval as a driver of availability

Some researchers argue that how easy it is to recall examples matters more than the number recalled.

Ease of retrieval definition

The subjective difficulty or ease experienced when recalling examples.

Assertiveness recall study method

Participants were asked to think of either 6 or 12 examples of times they were assertive or unassertive.

Assertiveness recall experiment question

“How assertive are you?”

Recall difficulty manipulation

Participants recalled either a small number of examples (6) or a large number (12).

Ease-of-retrieval paradox

Recalling more examples can make a trait feel less common because it is harder.

Assertiveness rating flip effect

Participants asked for 12 assertive examples rated themselves as less assertive than those asked for 6.

Reason for assertiveness flip

Thinking of 12 examples was harder, which made participants believe the behavior was less typical.

Ease-of-retrieval conclusion

Difficulty retrieving examples signals rarity to people.

Anchoring and adjustment heuristic

People begin with an initial value (anchor) and adjust from it when making estimates.

Anchor definition

A starting number or value that influences later judgments.

Adjustment process

People move away from the anchor toward the true value when estimating.

Insufficient adjustment bias

People adjust too little from the anchor.

Anchor direction effect

High anchors lead to higher estimates and low anchors lead to lower estimates.

Anchor sources

Anchors can come from arbitrary, irrelevant, or random numbers.

Example of irrelevant anchor

Your student ID number influencing unrelated estimates.

Example of internally generated anchor

The freezing point of water (32°F) influencing guesses about vodka.

Example of absurd anchor

Asking whether a textbook costs more than $7,128 before estimating price.

Economic man concept

The idea that a perfectly rational decision maker should ignore irrelevant anchors.

Human judgment reality

Real people are influenced by irrelevant numbers when making estimates.

Anchoring insight

Human numerical judgments are biased by surrounding numbers.

Types of anchors

Arbitrary anchors, internally generated anchors, and absurd anchors.

Arbitrary anchor example

Random ID numbers affecting guesses.

Internal anchor example

Using known facts like 32°F as reference points.

Absurd anchor example

Extremely unrealistic numbers influencing estimates.

Home sales anchoring example

Listing price serves as an anchor in house negotiations.

Home sale negotiation effect

A high listing price anchors buyers’ expectations.

Negotiation anchoring effect

Buyers adjust downward from a high listing price anchor.

Buyer internal anchor

The maximum price buyers are willing to pay.

Confirmation bias in anchoring

People think of reasons that support the anchor value.

High anchor reasoning example

Buyers may focus on positive features like landscaping.

Ignoring anchor-inconsistent evidence

People may ignore flaws like outdated plumbing.

Home sale anchoring study result

Overpricing homes by 10–20% slightly increased final sale price.

Treaty of Versailles anchoring example

Initial high reparations demands influenced later negotiations.

Negotiation adjustment in reparations

Later negotiations reduced the number but still anchored to the original proposal.

Planning fallacy definition

The tendency to underestimate how long tasks will take.

Planning fallacy thesis study

Psychology students estimated how long their senior thesis would take.

Planning fallacy conclusion

People systematically underestimate time required for projects.

Planning fallacy example: Sydney Opera House

Early estimate was 6 years and $7 million but it took 16 years and cost $102 million.

Planning fallacy pattern

Large projects often exceed both time and cost estimates.

Reason for planning fallacy

People focus on ideal scenarios rather than realistic obstacles.

Planning fallacy bias

Optimism about future task completion leads to underestimation.