Rational Roundup #4 – Anchoring News

When we created this publication format, our aim was to launch a medium where our members get updated on recent developments in behavioral science. Our Roundups will now be celebrating a comeback for a while. Continuing in the spirit of previous publications, the aim is to provide you with a number of interesting topics too small to constitute a proper essay or #30in30.

For a refresher, please read my essay on anchoring first, because this roundup is intended as a follow up. I will today present you with basic German legal literature focusing on the anchoring effect and the thoughts the authors present to their readers.

On November 11, 2013, the BaFin (German Federal Financial Supervisory Authority, “German SEC”) first published a guideline regarding the “determination of fines following violations of the German Securities Trading Act” and hence followed the example of US “Sentencing Guidelines”. The BaFin uses guidelines and instructions to help the business and legal sector to comply with an ever-expanding number of European legislation restricting the financial sector. Dr. T. Eggers, partner at PARK Wirtschaftsstrafrecht argued, that together with a number of legal reasons, the anchoring effect interferes with the aim to do justice in each individual case and the determination of an appropriate fine. This white-collar-crime lawyer holds the view that the system created by the BaFin – to first calculate a basic sum and then adjust it over two further calculations – will turn out to be a biased system. The initially calculated sum will influence the adjustment process. The guideline in question turns out to be more harmful than helpful. There seems to be a reason why the legislation did search for a broad wording in the securities trading act. (Eggers in: BB 2015, 651, 653)

Professor Steinbeck and A. Lachenmaier dedicated a full section of their essay to the anchoring effect. They reflect on different studies. German judges seem to be biased after the closing arguments of the prosecution. The researchers handed out a case to different judges asking for a judgement. To a second group, additional information was provided as to the plea of the prosecution for either two or 34 months. The Judges then turned out to judge in a biased fashion on the foundation of the respective anchor. Surprisingly, in further studies, effects exerted could even be shown due to suggestions of non-legal students, random guesses or even clues determined by the roll of dice. The same effects had been proven in civil tort claims, according to the authors. (Steinbeck/Lachenmaier in: NJW 2014, 2086, 2088)

Sec. 258 Para. 1 German Criminal Procedure Code states:

(1) After the taking of evidence has been concluded, the public prosecutor and subsequently the defendant shall be given the opportunity to present their arguments and to file applications.

(2) The public prosecutor shall have the right to reply; the defendant shall have the last word.

(3) The defendant shall be asked, even if defense counsel has spoken for him, whether he himself has anything to add to his defence.

König argues, that judges are influenced by an anchoring effect despite the right to reject this order under German legal interpretation of the section. To avoid anchoring by the closing argument of the prosecution defendants’ lawyers can themselves try to create an anchoring effect by asking the judge to give them the first word. This might prove helpful in cases where the judge is seen to be leaning in favor of the prosecution. (König in: MAH Criminal Defense, Point 10-14 (MAH Strafverteidigung, Rn. 10-14)

Falk and M. Alles showed one more time that the legal profession is prone to the anchoring effect. Attending a symposium, questionnaires were handed out with different key figures (4450 and 8450) and participants asked whether the stock market exceeded this number by the end of 2011. The first group predicted the stock market to close on 6.367 points. The second group however predicted the stock market to reach 6.716 points. The difference is 349 points equal to 5.48 percent. (Falk/Alles in: ZIP 2014, 1209, 1213)

Debiasing for the Anchoring Effect: Apparently, the anchoring effect can be mitigated by thinking about arguments that contradict the spotted anchor. Hence it is possible that the closing arguments of the accused/defendant’s lawyer counteract the prosecutor’s anchor. (Steinbeck/Lachenmaier in: NJW 2014, 2086, 2088)

Of course, anchoring effects have an impact on all parties in court. The first party to plead will influence the second party in their deliberation. This can be avoided by asking for a recess to prepare the closing arguments. In this break the judgment or claim can be determined which will be aim for from the judge either in criminal or in civil proceedings. This way you are not influenced by the other party’s anchor. This, however, does not protect you from early anchors, in contrast to the methods described in my last essay.

PHILIP HATTEMER

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