Anchoring Bias in Decision Making
From our upcoming book Wisdom in Buddhism
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Early or Anchoring Bias When we hold a hypothesis and begin to seek information to confirm or deny its validity, there is a strong tendency to believe any early data that tends to confirm our hypotheses. That is to say that we might ‘anchor’ our evaluation on the early data. The danger is that we don’t continue in the search for more information, believing that the early results will be the same as later results. While it may be true that more research may confirm what we’ve already discovered, it’s not a lock.
In the presidential election of 1948, the now famous Chicago Daily Tribune headline which screamed “Dewey Def
eats Truman,” proved to be embarrassingly wrong. The newspaper, relying on expert opinion from their Washington correspondent Arthur Henning and early results from closed voting stations on the east coast, went to press with the incorrect call for their first edition. The error was corrected in the second edition of the day, but the original was still out there, reminding everyone of the importance of waiting until all the votes were in .
In his book Old Path, White Clouds, Thich Nhat Hanh. tells this tale from the life of Buddha;
"Let me tell you a story about a young widower who lived with his five-year-old son. He cherished his son more than his own life. One day he left his son at home while he went out on business. When he was gone, brigands came and robbed and burned the entire village. They kidnapped his son. When the man returned home, he found the charred corpse of a young child lying beside his burned house. He took it to be the body of his own son. He wailed in grief and cremated what was left of the corpse. Because he loved his son so dearly, he put the ashes in a bag which he carried with him everywhere he went. Several months later, his son managed to escape from the brigands and make his way home. He arrived in the middle of the night and knocked at the door. At that moment, the father was hugging the bag of ashes and weeping. He refused to open the door even when the child called out that he was the man’s son. He believed that his own son was dead and that the child knocking at the door was some neighborhood child mocking his grief. Finally, his son had no choice but to wander off on his own.”
When we are attracted to one belief and hold onto that belief as if it were true, then we rob ourselves of the ability to see or know reality, even when it comes knocking on our door. In this case, the widower took the first piece of information he found (the unidentified corpse) and clung to the belief that it was his child, even when evidence to the contrary presented itself, so robbing him of a chance to reunite with his son.
How can Early or Anchoring bias be overcome? Be mindful that not all the data has yet been reviewed. Avoid making rash choices where all the data is not available. In the example of my wife and I purchasing the vehicle, we might have set multiple anchors, such as; maximum price, maximum odometer reading, maintenance costs, tire condition as well as the ability to transport 4’X6’ paintings. Where all conditions we met, then a ‘buy’ decision might be made. We might have assigned a numerical value to each anchor, such as 5/10 for price or odometer reading and only give the ‘buy’ decision if the total score was, say, 75 or higher.
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