The Robustness of Anchoring Effects on Market Good Valuations

Abstract

Ariely, Loewenstein, and Prelec (2003) showed that people’s judgments of a product’s value are strongly and systematically influenced by considering numbers (or “anchors”) which should be irrelevant to their valuations. However, subsequent studies showed inconsistent results while using different experimental protocols. To bridge the gap between conflicting prior studies, we replicated the anchoring effect in product valuations while also varying the experimental protocol. We examined whether the type of anchoring number (Social Security number vs. random number), recruiting method (classroom vs. email recruiting), or cover story (in-class market research demonstration vs. participation in research experiment) contributed to the divergent results. Our results replicated the anchoring effect at economically significant magnitudes (near the middle of the range for previous studies), but we did not find evidence that the procedural differences can account for the conflicting prior results.

Keywords: anchoring effect, product valuation, preference elicitation