However, anchoring can also occur unintentionally and derail successful ideation for design teams by causing people to accept distorted views. When designers apply it, they take advantage of users’ inability to make wholly critical judgments in the moment, and so prompt them towards actions that should be desirable for both the users and the brand. Anchoring is often used in user experience (UX) design. It’s also an age-old marketing strategy-appearing in everything from restaurant menus to car showrooms-that encourages customers to pick items because they’re a “good deal” compared with the most expensive offering (the anchor). Parents who ask their children “How often do you want to tidy your room: every day or every other day?” can appreciate its value. Used intentionally, anchoring (also called priming or focalism) can be an effective technique. Daniel Kahneman, Psychologist and economist noted for his work on the psychology of judgment and decision-making as well as behavioral economics Anchoring means Shaping Selections We’re not designed to know how little we know.” We have very little idea of how little we know. People tend to judge the value of the product in relation to the discount they get off the anchor price rather than the actual cost, as they will be more naturally interested in the difference between the anchor and the sale price rather than the absolute value of the product in question.“We’re blind to our blindness. Numerous examples of the Anchoring effect can be found in the commercial sector: during sales, it is common practice to show the original price crossed out with a sale price right below it in order to give customers the anchorage point of the higher pre-sales price and make it seem like a good deal comparatively. The experiment showed that the two groups gave significantly different answers – of 50 and 67 respectively – precisely because they had been influenced by the anchoring age values initially given.

The first group were asked whether they thought he died before or after age 9, and the second group before or after age 140 (both anchors far removed from reality as Gandhi actually died at 87 years old). In one study, two groups of students were asked to guess at what age Mahatma Gandhi died. Many experiments have shown that it is difficult to avoid the Anchoring effect, as it affects our thinking even when we’re unaware of it. The Anchoring effect will affect the way we negotiate, the prices we consider to be acceptable, the quality or value we perceive goods to hold, etc.

In other words, through the anchoring effect, we use ‘anchors’ or reference points to make decisions, rather than thinking rationally and objectively to make the best decision overall. Once an anchor is set, judgements are made by using this anchor as a point of reference and are more often than not biased by whatever this anchor happens to be. Anchoring therefore occurs when individuals use an initial piece of information in order to make subsequent judgements. The human mind does not consider the value of something based on its intrinsic value but rather compares different things against one another, making decisions based on these comparative values. The Anchoring effect, first studied by Tversky & Kahneman (1974), is a cognitive bias that causes people to rely too heavily on the first piece of information they receive as a point of reference.

Significance of the anchoring group