What is the anchoring bias?

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Understanding cognitive biases, such as anchoring bias, is crucial for professionals in the field of UX design. These biases are regular patterns of thought that can significantly influence a person’s choices and judgments when they receive and evaluate information from their surroundings. 

This series will delve into anchoring bias—one of the cognitive biases and its significant impact on UX design, a field where understanding and mitigating biases is crucial. 

What is anchoring bias?

Anchoring bias refers to people’s tendency to depend excessively on the first piece of information they hear about an issue. Regardless of the accuracy of the information, people utilize it as a reference point or anchor when making subsequent decisions. As a result, anchoring bias can produce incorrect choices, including salary negotiations, medical diagnoses, and purchases.

Anchoring bias definition

“Anchoring bias (also known as anchoring heuristic or anchoring effect) is a cognitive bias that causes people to prefer information obtained early in the decision-making process.”

People use this knowledge as an anchor and a reference point, but they need to modify their initial perceptions even after acquiring new information.

Once the anchor is established, successive judgments are made by adjusting away from it while remaining inside its defined range. 

For example, the initial price offered for a used car establishes the baseline for the remainder of the negotiations. Prices below the initial price are a good deal, even if they are still more significant than the car’s actual value. As a result, we have a distorted perception of reality and make biased decisions.

Anchors can be either internal or external, depending on their source:

1. External anchors are reference points others offer, such as the suggested retail price tags on various products.
2. Internal anchors are reference points based on beliefs, experiences, or contextual cues. For example, if your parents led an active lifestyle and exercised frequently, this experience may have established a baseline amount of fitness for you in adulthood.

Sidenote: It is vital to remember that the more we know about a subject, the less prone we are to succumb to anchoring bias. When we do not have enough information to determine how to value something, we are more susceptible to anchors.

Why does anchoring bias occur?

Although there is no agreement on why anchoring bias occurs, two processes can assist in explaining the phenomenon:

1. Anchoring and Adjustment

Anchoring and adjustment describe how people attempt to answer a general knowledge inquiry when they do not know the answer.

If people do not know the proper answer, they strive to make an educated guess and then adjust until they reach a reasonable conclusion.

This initial estimate becomes an internal anchor, influencing later modifications. Because the correction is frequently insufficient, it leads to a biased estimate. In other words, people always come up with a response close to the anchor.

2. Confirmatory hypothesis testing

When confronted with an external anchor, our first instinct is to evaluate it as a viable answer. While doing so, we activate previously stored information in our brain that is congruent with the anchor.

This information is more accessible; therefore, we utilize it to estimate the absolute value and selective accessibility.

After comparing it with a high anchor, people are more inclined to base their absolute assessment on information that the target object or circumstance has a relatively high value.

However, after comparing with a low anchor, people are more likely to base their absolute estimate on knowledge, implying that the value is relatively low.

How does anchoring bias affect your products?

Anchoring bias influences how buyers evaluate the value of a product and compare it to alternatives. In terms of pricing, we can offer discounts and sales.  Anchoring bias can have beneficial and harmful consequences, depending on the first price the customer is exposed. 

If a customer first sees a product at its original, non-discounted price, that number will serve as an anchor. They will consider this a terrific deal if they later see a discount offer!  Similarly, if the buyer is first introduced to the goods for a lower price, returning to the usual pricing may be perceived as too high.

Examples of anchoring bias

1. Pricing anchors 

The initial price a customer encounters significantly impacts their perception of what constitutes an expensive or reasonable price. For example, if a product is first shown at a high price, the benchmark may seem more attractive, leading customers to believe they are getting a better deal. 

Conversely, if a lower price is presented initially, the same form of default values might be deemed too costly. This can alter purchasing decisions as customers use the initial price as a reference point for evaluating subsequent prices.

2. Negotiation anchors

In negotiations, the first offer typically serves as a benchmark, shaping the trajectory of the talks. For instance, if a seller sets a high initial price, the buyer’s counteroffers will likely be higher than if the initial cost was lower. This initial anchor can significantly influence the final agreed-upon price, as all subsequent offers and counteroffers are measured against this initial benchmark.

3. Survey order 

The sequence in which questions are asked in a survey can influence participants’ answers. For example, early questions can set a context that affects how respondents perceive and answer later questions. If a survey starts with positive questions about a product, subsequent questions are more likely to receive favorable responses, while negative initial questions can have the opposite effect.

4. Form defaults

Default values can influence user input by serving as anchors. For instance, if a default option is pre-selected, users might be more likely to choose it, even if it’s not the best fit for their needs. This can affect everything from selecting a payment plan to choosing product options, as users might perceive the default as a recommended or standard choice.

5. Product recommendations

The first item in a list of product recommendations can set a standard for the perceived quality of the subsequent items. If the first product is highly rated or popular, users might view the following products more favorably. Conversely, if the first item is of lower quality, it might negatively impact the perception of subsequent recommendations.

6. Search results

The first search result can significantly influence a user’s perception of the relevance and quality of subsequent results. Users might assume that the first result is the most relevant or highest quality, setting a benchmark for evaluating the rest of the results. Regardless of relevance, this can affect the credibility and attention given to other search results.

7. Onboarding experience

A product’s initial onboarding experience can shape a user’s overall perception and satisfaction. A positive onboarding process can create a favorable first impression, making users more likely to overlook minor issues and continue using the product. Conversely, a negative onboarding experience can result in a poor initial impression, leading to increased scrutiny and a higher likelihood of abandoning the product.

8. Visual design

The first impression of a product’s visual design can anchor a user’s perception of the brand’s quality and reliability. For example, if a website or app has a sleek and professional design, users are likelier to see the brand as high-quality. Conversely, a cluttered design will create a negative perception that is hard to overcome.

How to avoid anchoring bias?

1. Comprehensive user research 

Thorough user research helps gather diverse insights, preventing overreliance on initial data. By engaging with a wide range of users and scenarios, designers can mitigate the impact of early biases and develop a more holistic understanding of user needs and preferences.

Follow these 5 simple steps to conduct comprehensive user research.

2. Regular usability tests 

Conducting usability tests is crucial for validating design decisions and identifying potential biases. These tests provide real-world feedback on how users interact with the product, helping uncover any anchoring effects and allowing adjustments to improve the user experience.

3. User feedback

Encouraging and actively listening to user feedback is essential for understanding their experiences and perspectives. By incorporating feedback into the design process, teams can iterate on their designs, ensuring they align more closely with user needs and reducing the influence of initial anchors.

4. Provide multiple perspectives 

Presenting users with various perspectives and options helps avoid tunnel vision. Offering a range of pricing options or showcasing diverse product recommendations can prevent users from being anchored to a single reference point, allowing for more informed decision-making.

5. Educate users

Informing users about anchoring bias and encouraging them to challenge their reference points can help mitigate its effects. By making users aware of how initial information can influence their judgments, they can be more critical and deliberate in their decision-making process. This education can be integrated into user onboarding, help documentation, or educational content on the product’s website.

Conclusion

Anchoring bias is a robust cognitive bias that substantially impacts users’ decisions and perceptions in UX design. While it can be challenging to overcome, understanding its consequences enables designers to create more effective and user-centered experiences. 

Designers can limit the influence of anchoring bias by using various research methodologies and providing consumers with diverse perspectives.

Frequently asked questions

1. What is meant by the anchoring effect?

The anchoring effect refers to cognitive bias, where individuals rely too heavily on the first piece of information they are given (the “anchor”) when making decisions. This can lead to skewed judgments or estimates because the initial anchor influences subsequent thoughts and decisions, even if the anchor itself is irrelevant or arbitrary. In other words, the anchoring effect shows how initial information can easily sway our minds, affecting our decision-making process.

2. What are the signs of anchoring bias?

Signs of anchoring bias include:

1. Fixating on the initial information without adjusting for new information.
2. Over-estimating or under-estimating values based on the anchor.
3. Making decisions that are skewed by the initial reference point.

3. How do we avoid anchoring bias?

To avoid anchoring bias, individuals can gather a wide range of information and perspectives before making a decision or judgment. This helps prevent being influenced too heavily by the first piece of information encountered, which is a common manifestation of anchoring bias. 

By considering multiple sources of information and taking the time to evaluate each carefully, one can reduce the impact of anchoring bias on one’s decision-making process. Additionally, being aware of anchoring bias and actively questioning initial assumptions can help mitigate its effects.

4. What are the four stages of anchoring?

Presentation of the initial anchor: 

This is the first stage in which a reference point or initial information is presented to individuals, which serves as a starting point for decision-making.

Adjustment and assimilation: 

In this stage, individuals tend to adjust their judgments or decisions based on the initial anchor provided. This adjustment may only be accurate or rational.

Influence on subsequent judgments: 

The anchor provided in the initial stage tends to impact subsequent judgments and decisions made by individuals.

Final decision or outcome: 

The final stage involves the individual arriving at a decision or outcome influenced by the initial anchor, even if it may not be the most rational choice.

Overall, understanding the stages of anchoring bias can mitigate the impact of this type of cognitive bias on their decision-making processes.