example of anchoring and adjustment heuristic

Their average subsequent estimate was 45%. Other participants were initially asked whether the percentage of African countries in the United Nations is higher or lower than 65%. Their subsequent average estimate of the actual percentage was 25%.

For example, some participants were asked whether the percentage of African countries in the United Nations is higher or lower than 10%. The participants were then asked to estimate the precise value of the quantity in question.

They spun a “wheel of fortune” and asked participants if certain quantities were higher or lower than the number on which the wheel landed. That is, the initial value exerts some “drag” on the final estimate, systematically biasing the result.Īmos Tversky and Daniel Kahneman, who brought the anchoring and adjustment heuristic to psychologists’ attention, provided a clear demonstration of the insufficiency of adjustment. The choice of the term anchor for the starting value speaks to one of the most interesting features of this procedure: People typically fail to adjust sufficiently. You start with an initial anchor value and then adjust until an acceptable answer is found. “My last paper took a week to write, but this one is more demanding so maybe two weeks is a good guess.” “Mortgage rates are low by historic levels, so perhaps they’ll be a couple of points higher in five years.” “The fatality rate in the last war was 1.5%, but our enemies are catching up technologically maybe 4% is a more likely figure in the next conflict.”Įstimates such as these are based on what psychologists call the anchoring and adjustment heuristic. One of the most common is to start with a value that seems to be in the right ballpark and then adjust it until a satisfactory estimate is obtained. How long will it take to complete a term paper? How high will mortgage rates be in five years? What is the probability of a soldier dying in a military intervention overseas? There are many ways to try to answer such questions. Life requires people to estimate uncertain quantities. Anchoring and Adjustment Heuristic Definition

Example of anchoring and adjustment heuristic