Anchoring Bias: How it affects us & Why is it Important?

What is Anchoring Bias?

Anchoring Bias is a type of cognitive bias where people rely greatly on the information initially given to them. This initial information they receive is called the anchor.

When creating a home or a building, we are given blueprints. Our expectations of the final form of the house are determined by the blueprints. Complete work may or may not look as we envisioned. The blueprints are our anchor points.

blueprints
Photo by Sven Mieke on Unsplash

How does anchoring bias affect decision making?

This bias is one of the most used cognitive biases by marketers and developers because of how effective it is. 

So how does it affect our decisions? Let’s take an example. When buying a jacket, the seller tells you that one type costs $14.00 and the other type costs $19.00. This initial information makes us believe that the higher-priced one is probably better in quality than the other. This is how anchoring bias affects our thinking.

When negotiating the seller tells you the initial price of the product. This price is now the anchor. Now both of you will negotiate the price relative to the initial pricing. If the initial price was $120.00 you would probably ask him to lower it to $100.00. He would then argue that he can only lower it to $110.00. This way the anchor point affects our actions.

negotiations
Photo by energepic.com from Pexels

What the above example also tells us is that initial information can set a starting point. This then leads to negotiations revolving around the starting point.

Why is anchoring bias important for marketers & designers?

Let’s find out why is this bias important for marketers and designers.

  • Relaying message of our design
    The first thing we show our users are going to be anchored into their brain. This provides us with a great opportunity to tell them exactly what our concept is.

    This is why many websites try to explain their purpose from the first sentence in their hero banner. This sentence is going to be the anchor for them and they’ll process the contents of the website accordingly.
  • Marketing products
    The first information of our products should be how good the product is. It could also be how better our deal is than any other product. It’s a common tactic to bring in buyers.

    Take the example of game and movie trailers for instance. These trailers are important for providing an insight into what the final product looks like. People make their decisions depending on the quality of the trailer. Thus a lot of effort is put into these trailers as a marketing tactic.
     
  • Keeping users intrigued
    This bias can be used to bring in users and keep them intrigued. Many news sources use such methods which are mostly clickbait. Something like “Read ill the end to find out…” or “Top 10 most rich artists (no.6 will shock you)”.

    These headlines are the anchor for people. Such headlines mostly now have become an anchor to know which sites to avoid instead. The technique, however, has not died down. YouTubers often use these methods to gather viewers.

Summing Up

Anchoring bias describes that the initial information is what matters. it also gives us a general idea of how people think. Skillful use of this bias is an important factor for a well-rounded product.

Further Reading