Anchoring is a cognitive effect with utmost importance to legal professionals’ work. Its applicability ranges from mediation to negotiation to court trials. Almost every legal professional will discover its impact on his own daily work. Research shows, that especially legal professionals are not immune but rather prone to the anchoring effect. Hence, this article will give you a thorough start into ‘immunization’ as well as the use of this bias to your own and your clients’ benefit.
“Anchoring or focalism is a term used in psychology to describe the common human tendency to rely too heavily, or “anchor,” on one trait or piece of information when making decisions. During normal decision making, individuals anchor, or overly rely, on specific information or a specific value and then adjust to that value to account for other elements of the circumstance. Usually once the anchor is set, there is a bias toward that value.” – ScienceDaily
The anchoring effect is mostly a combination of two different cognitive barriers. First, the Anchoring Bias is the tendency to make a decision or evaluation based on the first piece of information received (example 1). Second, the Anchoring Heuristic refers to the tendency to take the first piece of information at face value, creating the foundation for everything that follows (example 2).
Example 1, as taken from a different psychological glossary: If we were shopping for a bicycle and get offered a bike 30 percent off, we will approach this item under the impression it was a great deal, even though it might still be more expensive than the usual market price.
Example 2: Imagine, for example, you are trying to sell an inherited plot of land. As soon as you mention the amount of $ 600.000,- in the negotiation, the other party is strongly compelled to try to negotiate down from that price while you yourself try to keep the final price as close as possible to your initial anchor.
There have been many studies conducted to further investigate the anchoring effect. Anchoring as a phenomenon of adjustment was firstly theorized by Kahneman and Tversky. Participants were asked about the number of African countries in the UN. Before giving their estimates, participants were invited to play a Wheel of Fortune, unbeknownst to them being geared to show specific numbers as the result of each turn. The average estimate regarding the number of African countries in the UN of those participants who saw the wheel show 65 was 45 percent, while the median estimate of those participants who saw the wheel show 10 was 25 percent. (Tversky, A.; Kahneman, D. (1974). “Judgment under Uncertainty: Heuristics and Biases”. Science. 185 (4157): 1124–1131.)
Another piece of research showed that the first two digits of a social security number, written down by the participants, had a measurable impact on later bids on objects which value they did not know.
Surprisingly anchoring even works with obviously incorrect anchors. Researchers asked their participants either whether Mahatma Ghandi died before or after the age of 9 years or whether he died before or after the age of 140 years. The average of answers given to the two questions differed by 17 years, although these anchors seemed to be obviously irrelevant. The same effect was reported when asking participants when Einstein firstly visited the United States. Completely irrelevant anchors as 1215 and 1992 caused anchoring effects as strong as more plausible anchors. (Strack, Fritz; Mussweiler, Thomas (1997). “Explaining the enigmatic anchoring effect: Mechanisms of selective accessibility.”. Journal of Personality and Social Psychology. 73 (3): 437–446.)
Apparently, there are many different influencing factors. In contrast to earlier hypotheses, people psychologically classified as ‘sad’ seem to be more likely to use anchoring than people with neutral or happy mood. (Englich, B.; Soder, K. (2009). “Moody experts: How mood and expertise influence judgmental anchoring”. Judgment and Decision Making. 4: 41–50)
Whereas people high in extroversion are less prone to anchoring effects, those seeking new experiences and people high in agreeableness and conscientiousness are more likely to be affected by anchoring. (Eroglu, Cuneyt; Croxton, Keely L. (2010). “Biases in judgmental adjustments of statistical forecasts: The role of individual differences”. International Journal of Forecasting. 26 (1): 116–133. / McElroy, T.; Dowd, K. (2007). “Susceptibility to anchoring effects: How openness-to-experience influences responses to anchoring cues”. Judgment and Decision Making. 2: 48–53.)
There is conflicting evidence whether or not cognitive ability has an impact on anchoring effects. While some researchers assume an impact, others deny it. While this debate clearly has not been settled yet, the following research might be interesting for further reading: PRO: Bergman, Oscar; Ellingsen, Tore; Johannesson, Magnus; Svensson, Cicek (2010). “Anchoring and cognitive ability”. Economics Letters. 107 (1): 66–68. / CON: Oechssler, Jörg; Roider, Andreas; Schmitz, Patrick W. (2009). “Cognitive abilities and behavioral biases”. Journal of Economic Behavior & Organization. 72 (1): 147–152.
In a study, participants were exposed to an anchor and explicitly informed about the impact of the anchor on their thinking. Nevertheless, they still showed a significant difference in behavior compared to the control group, which was neither anchored nor were anchoring effects explained. Thus the research concludes, even though the participants were aware of the anchoring effect, they were still unable to avoid it. (Wilson, Timothy D.; Houston, Christopher E.; Etling, Kathryn M.; Brekke, Nancy (1996). “A new look at anchoring effects: Basic anchoring and its antecedents.”. Journal of Experimental Psychology: General. 125 (4): 387–402.)
Even an offered payout for unbiased answers and a successful adjustment to the anchoring effect was not bearing any fruit. (Simmons, Joseph P.; LeBoeuf, Robyn A.; Nelson, Leif D. (2010). “The effect of accuracy motivation on anchoring and adjustment: Do people adjust from provided anchors?”. Journal of Personality and Social Psychology. 99 (6): 917–932.)
For detection of an anchor, practitioners of rationality should keep their mind in a state of alertness when entering a situation prone to anchoring being employed. I myself noticed that it is easier to build an awareness for anchors than for other cognitive biases. You will realize that in such situations your consciousness will alarm you faster than you will expect. However, it is on you to pull the mental strings necessary to dissolve the anchor within the critical moments after the opposite party tries to establish it in order to relieve your or a third party’s subconscious mind from the restraints aimed at being imposed by the party employing anchoring.
Whereas you can fight anchors deployed in a financial context by replacing the suppositions with quantitative data, this might not always be possible in your field of legal work. Being a legal professional, you most likely encounter anchors in situations that force you to react confident, fast and efficient.
I recently had the chance to attend a lecture held by Prof. Dr. Lars Kirchhoff, who is a well-known Mediator, scientific head of the Masters Program Mediation and head of the Institute for Conflict Resolution Europe University Viadrina/Humboldt University. Prof. Kirchhoff is very experienced in Mediation and especially in debiasing of cognitive barriers in all the different kinds of alternative dispute resolution. He advises to encounter anchoring effects by either immediately setting many different anchors to confuse the brain (“I offer you 600k for this plot of land, bec-…” – “Or 1 million, or 4$, maybe 700€, who knows yet?”) or by turning a number into an abstract number rather than a set worth (“I offer you 600k for this plot of land, because I- …” – “600k of what? Yen? Pebbles? Marbles? Words?”). I found this approach very interesting and it proved effective in a number of different negotiations.
Another approach by Eliezer Yudkovsky is to try to discard the anchor entirely and to come up with a new estimate completely without sliding from the initial anchor. However, Yudkovsky concedes that this method might prove ineffective, since participants instructed to avoid anchoring still were not able to avoid it completely. Therefore, he advises to first think of an anchor in the opposite direction and then try to set a new estimate.
I myself recently developed the idea of an exuberant inside-correction. This approach goes a little bit in the direction of Yudkovsky’s advice. Given that participants did show anchoring effects even though they tried to counter the cognitive dynamics, I would advise to first think of a correction that seems to be appropriate and then double the estimate. This leads you a bit far from your gut feeling, but simultaneously away from the behavior of the test participants. Hence, it is likely that you will be less affected by the anchor. As an example: The Wheel of Fortune shows 65. I get asked: What percentage of the UN is made up of African nations? Step 1: I would guess 45 percent according to the research. I would define the anchoring effect to pull me against the anchor with approximately 10 points. Hence, I need to lower my answer by 10 points to reverse the anchor. Thus, my answer is 35 percent. The correct answer is 28 percent. As you can see, I am a lot closer to the truth than the participants in Kahneman/Tversky’s study.
Legal Profession’s Opportunities and Risks
Experience can sometimes reduce an individual’s vulnerability but experts, however, are still prone to anchoring effects. Englich/Mussweiler/Strack researched the impact of the anchoring effect on the legal profession. They found that even experienced legal professionals were affected by anchoring.
“Judicial sentencing decisions should be guided by facts, not by chance. The present research however demonstrates that the sentencing decisions of experienced legal professionals are influenced by irrelevant sentencing demands even if they are blatantly determined at random. Participating legal experts anchored their sentencing decisions on a given sentencing demand and assimilated toward it even if this demand came from an irrelevant source (Study 1), they were informed that this demand was randomly determined (Study 2), or they randomly determined this demand themselves by throwing dice (Study 3). Expertise and experience did not reduce this effect. This sentencing bias appears to be produced by a selective increase in the accessibility of arguments that are consistent with the random sentencing demand: The accessibility of incriminating arguments was higher if participants were confronted with a high rather than a low anchor (Study 4). Practical and theoretical implications of this research are discussed.” (Englich, B.; Mussweiler, Thomas; Strack, Fritz (2006). “Playing Dice With Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making”. Personality and Social Psychology Bulletin. 32 (2): 188–200.)
Anchoring effects are found almost within the full spectrum of appropriate dispute resolution. In mediation one might try to anchor his interest as soon as possible – it is the responsibility of the mediator to dissolve the anchor. However, if the mediator fails to do so, you might consider him biased. Either way, you should dissolve the anchor as soon as possible to protect your client.
In arbitration and court trials the judge panel has responsibility over dissolving anchors and ensure a fair trial. Since most courts are not trained in debiasing techniques, you should protect your client by dissolving the anchor yourself. There might be some internal structure deficiencies that cannot be encountered. In Germany for example, the prosecution is allowed to plead first. Whether this constitutes an anchor is not researched yet but evidence points to an answer in the positive.
Anchoring plays a leading role in negotiations. As there is the saying “the first anchor wins” you might want to counter an anchor by the opposite party by dissolving it quickly and then setting a new anchor. The more experience you gain in this technique, the better you will get. The opposite party will stay in the belief that their anchor is working but then discover to be pulled against your anchor. This strengthens your position. Because the other party thought their anchor to be working, they might not react fast enough to dissolve your anchor in turn.
Finally, there is the famous saying: “use it or you’ll lose it”. This is applicable to cognitive anchors as well. After two days of negotiation, the anchor might be worn off. Remind the other party that there is still an anchor working by repeating it once in a while.
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