An Introduction to Critical Thinking and Creativity - always yours

CONTEXT BIAS 187
• Recent experiences have a greater impact than earlier ones. This is known
as the recency effect. This is perhaps one reason why many lawyers present
their most important witnesses near the end of the trial.
20.2 CONTEXT BIAS
A context bias is a bias in our judgment triggered by irrelevant features of the situation
in which the judgment in made. These features might have to do with the
way a problem is presented, or are features of the environment that have very little
to do with the problem we are trying to solve.
20.2.1 Presentation effects
What is interesting about the third warmup question is that the 50 million figure
in the question has a big influence on the answers that people come up with. Typical
guesses might be between 30 and 100 million. Now ask your friends the same
question, but replace the 50 million with the more accurate estimate of 5 million.
The average answer is likely to be much smaller. However, surely the question
does not imply in any way that the number mentioned is close to the correct answer.
This is an illustration of anchoring, where we arrive at our judgments by
making minor adjustments to some arbitrary reference point given to us (the anchor).
We can therefore manipulate judgments by changing the reference point.
In a vivid demonstration of the anchoring effect, MIT professor Dan Ariely
asked his students to write down the last two digits of their Social Security number
(a form of identity in the United States). The students then bid on items such
as wine and chocolates in an auction. It turns out that those who wrote down a
higher number are more willing to offer a higher bid, sometimes by almost 100
percent. Clearly their perception of what counts as a fair price had been unconsciously
biased by some completely irrelevant information.
In sales and marketing, the anchoring effect can be used to influence consumers.
Some researchers asked real estate agents to inspect a house and estimate
its value. Earlier, some agents were given a higher list price, some a lower one. The
list price is the anchor that affected the agents' estimates, even though the agents
were supposed to be experts. On average, those who saw the higher list price gave
a higher estimate. When asked, they also denied having taken the list price into
account. Instead, they would cite features of the property to justify their estimates
(Northcraft and Neale, 1987).
The anchoring effect also offers lessons for business negotiations. The traditional
wisdom is that you wait for the other party to make a move first, because
the offer tells you what he or she might be thinking. But research suggests that a
party making the first offer can sometimes gain an advantage by skewing the final
outcome through anchoring (Galinsky, 2004).
Here are more examples of how context affects our decisions without our conscious
awareness: