Essay On Anchoring Effect

There is a famous phrase: ‘There is C between B and D’, which means that there is a ‘choice’ between ‘birth’ and ‘death’. Some of the Koreans argue that C is ‘chicken’, not ‘choice’, but let’s just simply pass it. Since you open your eyes in the bed with shiny sunlight that is flooded into the room, you are at a crossroads at every single moment until you lie down on the bed and close your eyes. After you conclude that most of the decisions that you made are rational, you fall into a deep sleep with satisfaction. However, most of the decisions might have been irrational as there is an anchor that forms unconscious standard during the process of decision making, called anchoring effect. Anchoring effect is human nature that interferes with reasonable and rational decision, and that’s why it’s unavoidable. Since experts of psychology Tversky and Kahneman introduced the concept of anchoring-as-adjustment theory in 1974, psychologists and experts started to pay attention to this cognitive bias. Until today, there is no theory that perfectly explains the anchoring effect, and there’s no one who can explain why it happens. However, it’s fundamental and common concept that anchoring effect is a basic human tendency. To explain more in

Although negotiation is a process of mediating conflict and draw the best way to maximize their interest, anchoring effect interferes with it. There were two groups of subjects who were assigned randomly, (1) one of two versions of the market, or (2) as buyer or seller. Each of them got the individual profit schedule that they have to achieve during the negotiation. People who started negotiation, initiators, achieved higher final profit than non-initiators. Higher values of initial offer caused higher values of final result, and it means, final profit of both initiators and non-initiators were affected by the initial offer