Anchoring on Valuations and Perceived Randomness

Abstract

Anchoring is a cognitive bias whereby individuals decisions are influenced by an uninformative number, the anchor. Anchoring bias in valuations of goods has important implications for consumer decisions, but its robustness has been questioned by recent studies. In this study, we investigate the effect of the perceived informativeness of the anchor on valuations. In an online experiment we vary the amount of information about the anchor generating process, and hypothesize that the more information provided, the less scope is left to perceive the anchor as non-random/informative, thus mitigating anchoring effects.

Keywords: Anchoring, Replication, Experiment