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The Anchoring Effect of First Impression and How it Affects Us

Satyajeet Vispute Mar 22, 2020
First impressions are truly the last ones, thanks to a psychological phenomenon known as the anchoring effect. Read ahead to find out what the anchoring effect is, and how it affects our daily lives.

Anchoring Power

J.C. Penny learned the true power of the anchoring effect the hard way, when they decided to stop promoting sales and offering discount coupons, in favor of 'everyday low pricing'. Shoppers refrained from buying and sales plummeted until the J.C. board ousted its chief executive, Ron Johnson, and brought back the coupon and weekly sales system.
Will a Gucci sweater keep you warmer than a $7 one from Walmart? Most likely not. Yet you would be willing to shell out $150 on it. Why is this? Well, the short answer is simply because it's made by Gucci!
As opposed to Walmart, the Gucci brand name is synonymous with fashion and luxury. Hence, it is natural for you to assume that it is of a better make and higher quality, and thus feel that its cost is justified. Yet in the aforementioned case as well as many others in our day-to-day lives, this type of reasoning more often than not turns out to be flawed.
This lack of better of judgment is actually a common trait of most human beings, which psychologists call the anchoring effect. Let us take a closer look at this psychological phenomenon and examine how it affects us.

The Anchoring Effect

The anchoring effect tells us something very fundamental about the way we think. It describes the human tendency to use reference points while making decisions.
This phenomenon takes place at a subconscious level so that most of the time we aren't even aware of its working. Psychologists also refer to the anchoring effect as anchoring bias or focalism.

Anchoring Bias and Focalism

The term anchoring bias indicates that this mental trait is erroneous and leads to less than optimal conclusions. The term focalism refers to the fact that the anchoring effect causes us to focus on one thing, while inadvertently, and unjustly excluding the rest.
The anchoring effect comes into play when we are evaluating something which we aren't sure about. In such cases, we tend to make decisions on the basis of the first piece of information (anchor) that we are provided with.

Why Does it Take Place

Psychologists believe that the anchoring effect stems from our need to look for confirmation when we are unsure or unable to explain something on which we are required to make a decision on.
To explain this, take the example of a married couple. The husband wanting to be a better partner than his own dad was to his mom, helps out more with the housework. He naturally assumes that his wife will appreciate this, only to find to his disbelief that she accuses him of being a sloth. So, what's happening here? Well, it's the anchoring effect at play.
How does someone decide if he has worked enough or not? With the help of a work-reference of course. The husband refers to the example of his own father. For him, the minimal help that his father used to contribute, is the anchor, and so he feels that the comparatively more household work that he does is appreciable.
On the other hand, to decide whether her husband is helping out enough with the domestic chores, the wife refers to the amount of work she herself has to do. This is her anchor, compared to which she finds that the husband doesn't do enough, and therefore criticizes him.

Anchoring Effect Bias Examples

Hungry Again

Anchoring effect takes place during a variety of everyday events. For example, you must have noticed that after you have had a full lunch, you often feel that you won't be hungry again in the evening or night.
This happens because your mind uses your current emotional state as an anchor to presume that since you are so full, it is unlikely that you will be hungry again. Yet only a few hours later, when the food in your stomach settles down, you find that you are ready to have more.

How Cheap!!

Sellers and agents will intentionally quote exuberant prices for their products. They do not intend to sell at those prices but, they set the price anchor at a higher level, so that when you tell them, they can lower it a little.
Since in your mind, the high price has already anchored, you keep referring to it and when the price is reduced, you believe that you are getting a good bargain which forces you to make the purchase, even though you are paying more than the product is actually worth.

Salary Negotiations

Anchoring effect can even be observed during salary negotiations.
If your employer asks you about your expectations and you quote a small amount, you are likely to end up with that or an even smaller salary amount. Conversely, if you quote a higher expected salary, without it being too extravagant of course, you are more likely to secure a good pay package.

Trial Proceeding

The anchoring effect is also seen in a trial proceeding. As soon as the members of jury see a defendant standing in a courtroom, the thought that he/she must be guilty immediately anchors itself in their minds.
Then, throughout the proceeding, the jury is only looking for evidential confirmation of the crime, which tends to bias their judgment. It then becomes the job of the defense to release these anchors and prove his/her innocence beyond all reasonable doubt to secure an acquittal.