One day I walked into a clothing store and tried on a beautifully made pair of shoes. I immediately loved them. I imagined how much everyone would admire the shoes on me, but when I looked at the price I decided not to purchase the pair of shoes. The shoes went for 34,000 Kenyan shillings (400 US dollars). I reluctantly returned the shoes to the rack. The store attendant approached me and informed me that they would give me the shoes for 8, 600 Kenyan shillings (100 US dollars) and I immediately decided to buy the pair. However, when I thought about the situation later, I realized that I had been tricked.
Many store attendants use a concept called the ‘anchoring effect.’ The anchoring effect is the tendency to rely too heavily on the first piece of information offered when making certain decisions. Anchoring occurs when we depend on the initial information offered to us in order to frame our judgment. We tend to make decisions that rely heavily on the anchors we form.
When I was deciding whether or not to purchase the shoes, the anchor was the initial high price of 34,000 Kenyan shillings (400 US dollars). After the price was reduced I compared the new, comparatively lower price to the initial price and then decided to quickly purchase the shoes. However, it was dangerous to let anchoring take control of my decision making. At that moment I didn’t consider other factors such as whether it were possible to get the same kind of shoes in a different shop for a lower price or if I really needed the shoes in the first place. Since my brain and my emotions were only focused on what was directly in front of me, I made a decision that was not well thought out.
In fact, most people have fallen for the exact, same trick that I fell for. This is why it is important to understand why we should never let anchors determine our decisions and what we should do to avoid anchoring.
It is important to avoid situations that influence our decisions based on an initial anchor. The mood that we are in is one of the factors which make us prone to anchoring. In a situation such as buying shoes, it is important to separate the way we feel from the decision. Personality type can also determine if you will fall prey to an anchoring attempt. People who tend to be agreeable are more likely to be affected by anchoring, while those who are more self-assured are less likely to be affected. Consider what personality type you are before making a decision.
It is very difficult to dispose of anchors and we experience them all the time throughout our day. Has anyone ever told you to make a good first impression on someone you are meeting for the first time? You are being told this because an anchor will be formed when you meet that person, and this often will influence how they judge you for a long time afterwards. It is important that we apply rational considerations in order to neutralize the anchor effect. In my particular case of buying shoes, I should have asked myself these questions. First, is the price really fair? Second, why was the price reduction offered to me only after I had decided to leave the shop? Lastly, do I really need the shoes?
It is difficult to avoid anchoring when we make decisions, which is why it is even more important to be aware of them. Anchoring reveals to us how powerful first impressions are. Anchoring reveals how important it is to be aware of our moods and personality types, and to separate temporal feelings from rational decision making. Ultimately, anchoring shows us how we can deceive ourselves into making a decision which is not really our own, or is not really the best for us.
By Winnie Ngota a WYA intern from Kenya