WEBVTT - Anchor in the Mind 0:00:03.040 --> 0:00:05.840 Welcome to Stuff to Blow Your Mind from how stup 0:00:05.880 --> 0:00:14.840 works dot com. Hey, welcome to Stuff to Blow your Mind. 0:00:14.920 --> 0:00:17.920 My name is Robert Lamb and I'm Joe McCormick and Robert. 0:00:17.920 --> 0:00:20.360 I've got a trivia question for you. All right, hittany, 0:00:20.840 --> 0:00:22.480 this is for all of you out there listening as well. 0:00:23.520 --> 0:00:29.280 When Marie Curie died, was she older or younger than 0:00:29.320 --> 0:00:34.800 twenty seven years old? Think about your answer, older or 0:00:34.880 --> 0:00:38.600 younger than seven? Okay, well, I have to say she 0:00:38.720 --> 0:00:40.839 was definitely older. But I have to admit that I 0:00:40.840 --> 0:00:43.199 read an excellent glow in the dark book about her 0:00:43.320 --> 0:00:47.159 a few years back, titled Radioactive Marie and Pierre Curie, 0:00:47.320 --> 0:00:50.120 A Tale of Love and Fallout, which, by the way, 0:00:50.600 --> 0:00:54.360 heading into Valentine's Day, it's an excellent Valentine's Day book 0:00:54.360 --> 0:00:56.320 to give somebody. Wait, hold on, so this is going 0:00:56.400 --> 0:00:58.360 to be about them, but it's glow in the dark 0:00:58.440 --> 0:01:01.120 signaling that the book is radio active and will poison 0:01:01.160 --> 0:01:03.760 you and your fingers will fall off. And well, when 0:01:03.760 --> 0:01:05.680 you put it like that, it doesn't sound very romantic, 0:01:05.800 --> 0:01:08.880 but it's it's a it's a very romantic book. But 0:01:08.959 --> 0:01:11.319 I know I know from having read that that she 0:01:11.319 --> 0:01:15.560 she would live significantly longer than than her twenties. Well, okay, 0:01:15.560 --> 0:01:18.400 so most people probably do know that. But here here's 0:01:18.400 --> 0:01:21.520 another chance. Just guess what age she died. How old 0:01:21.600 --> 0:01:24.480 was Marie Curry when she died? And just think about it. 0:01:24.480 --> 0:01:26.240 This becomes a little harder for me because I have 0:01:26.640 --> 0:01:33.440 I can clearly picture a photograph of her. I'm gonna say, 0:01:33.640 --> 0:01:36.280 very close. Marie Cury died in nineteen thirty four at 0:01:36.319 --> 0:01:40.000 the age of sixty six, So yeah, very close. Now 0:01:40.319 --> 0:01:43.840 you listening at home, how close were you? Did you overshoot? 0:01:43.880 --> 0:01:46.800 I assume not many people undershot the age. If you did, 0:01:46.880 --> 0:01:49.680 that's okay, no shame in it. I tried this on 0:01:49.720 --> 0:01:53.200 somebody yesterday and she guessed forty four. I did the 0:01:53.240 --> 0:01:56.760 same thing. I said, older, younger than seven? What's the age? 0:01:56.880 --> 0:01:59.840 And when when I told her the answer that it 0:01:59.880 --> 0:02:03.480 was actually sixty six, the person I was talking to said, oh, well, 0:02:03.640 --> 0:02:05.720 I've seen pictures of her that looked older than that, 0:02:05.760 --> 0:02:09.320 but I guess I assumed it was from all the radiation. Okay, 0:02:10.000 --> 0:02:12.720 I see where you're going with this. Though, the the 0:02:13.000 --> 0:02:15.399 question you asked by putting twenty seven in there, you're 0:02:16.000 --> 0:02:19.080 you're you're sort of lowering their expectations. It could be, Yeah, 0:02:19.080 --> 0:02:21.120 maybe something's going on there. I've got another one for you. 0:02:21.800 --> 0:02:25.320 When Sean Connery took a role in the film Highlander 0:02:25.320 --> 0:02:31.160 to the Quickening one of his finest choices, Yes, the 0:02:31.200 --> 0:02:34.160 planet's eist. When he took that role, what was his 0:02:34.200 --> 0:02:37.079 salary for the role? Was it more or less than 0:02:37.160 --> 0:02:41.080 thirty one million dollars? Okay, this one's tough for me 0:02:41.120 --> 0:02:45.000 because I love movie trivia, but I'm not very good 0:02:45.000 --> 0:02:47.640 with the economic movie trivia, so I don't even have 0:02:47.680 --> 0:02:50.760 a very good starting point. It seems to me, though, 0:02:51.360 --> 0:02:55.079 that sounds like an awful lot of money. Um, especially 0:02:55.080 --> 0:02:59.480 for Highlander two. Yeah, Like that's that's some that's some 0:02:59.680 --> 0:03:02.360 big Uh. That's that's some Tom Cruise money right there, 0:03:02.400 --> 0:03:05.960 I would guess. So you're saying lower maybe, But then 0:03:06.000 --> 0:03:08.240 this was you have to put yourself in a pre 0:03:08.360 --> 0:03:12.680 Highland or two era, So Highlander two can't imagine it, 0:03:13.200 --> 0:03:16.440 unable to process, cannot compute. It's It's true. I don't 0:03:16.440 --> 0:03:18.919 think I watched Highlander. I got excited to watch Highlander 0:03:18.960 --> 0:03:21.960 one after I saw trailers for Highlander two. I believe 0:03:22.000 --> 0:03:26.160 that's how that went down. But yeah, not not knowing 0:03:26.200 --> 0:03:30.280 what we know now about the the the public reception, 0:03:30.880 --> 0:03:33.799 uh to to Highlander two, one could easily say, yeah 0:03:33.800 --> 0:03:36.120 it was everyone was just totally optimistic. It was a 0:03:36.160 --> 0:03:39.280 follow up to Highlander, which was arguably, you know, one 0:03:39.280 --> 0:03:43.520 of the greatest films of its generation. Okay, so guess 0:03:43.600 --> 0:03:47.320 taking out what was his actual salary? All right, you're 0:03:47.360 --> 0:03:52.560 asking about thirty five one I'm going to have that 0:03:52.680 --> 0:03:57.200 and say fifteen million? Is that a lot for Sean Connery? Oh? 0:03:57.240 --> 0:04:01.120 Your way over the mark. Now, I do have to 0:04:01.160 --> 0:04:04.000 admit that my answer comes from a sketchy looking website, 0:04:04.000 --> 0:04:05.800 which is the only place I could find an answer 0:04:06.480 --> 0:04:09.120 called like the movie time. So maybe this is wrong, 0:04:09.200 --> 0:04:11.440 but the answer I could find said he was paid 0:04:11.480 --> 0:04:14.400 three point five million. Okay, well, yeah I was way 0:04:14.440 --> 0:04:17.479 over the line. Then yeah, but worth every penny really 0:04:17.560 --> 0:04:21.119 and then some exactly right. But notice how far off 0:04:21.240 --> 0:04:25.599 the mark you were given those starting questions. I asked, 0:04:25.680 --> 0:04:28.320 was she older, younger than twenty seven? Or was it 0:04:28.360 --> 0:04:32.120 more or less than thirty one million? And I wonder 0:04:32.360 --> 0:04:37.200 to what extent those questions changed the kind of answer 0:04:37.279 --> 0:04:40.520 you gave to your ultimate guests on her age at 0:04:40.640 --> 0:04:44.640 death or on the movie salary? What would you have 0:04:44.680 --> 0:04:48.880 said if you hadn't received those questions to start with? Well, 0:04:49.160 --> 0:04:51.760 in the case of the Highlander question, I was just 0:04:51.839 --> 0:04:54.840 kind of trying to reverse engineer and answer. I think 0:04:54.839 --> 0:04:56.599 I would have I still would have missed the mark, 0:04:56.720 --> 0:04:58.640 but I think I would have probably said something like 0:04:58.800 --> 0:05:01.839 five or six million, a lot closer, A lot closer, 0:05:01.960 --> 0:05:06.400 certainly less of an exaggeration, but the but but but 0:05:07.160 --> 0:05:09.240 you were pretty much on the money on Murray Curry, right, 0:05:09.279 --> 0:05:11.479 So yeah, but but that was an area where I 0:05:11.480 --> 0:05:14.160 I have read about her and I think I did 0:05:14.160 --> 0:05:16.720 a podcast that talked about her a while back, so 0:05:16.800 --> 0:05:19.120 I had some sort of I had some level of 0:05:19.440 --> 0:05:22.440 expert information there, but I had nothing really to go 0:05:22.480 --> 0:05:25.239 on for the Highland or two one. Okay. So this 0:05:25.360 --> 0:05:28.120 effect that we've just been demonstrating is what we're going 0:05:28.160 --> 0:05:32.120 to be talking about today. And this is a psychological effect. 0:05:32.200 --> 0:05:34.120 It's been written about a lot in the field of 0:05:34.200 --> 0:05:39.599 behavioral economics, but it's fundamentally a psychological phenomenon known as 0:05:39.800 --> 0:05:43.880 the anchoring bias, and I would argue it's one of 0:05:43.920 --> 0:05:48.640 the most powerful, most well known, and most easily exploited 0:05:48.720 --> 0:05:51.840 vulnerabilities in our minds, and for that reason, I think 0:05:51.839 --> 0:05:55.960 it's something that really everybody should know about, because it's 0:05:56.000 --> 0:05:59.440 something that people will constantly be using to try to 0:05:59.480 --> 0:06:02.000 get the per hand on you for the rest of 0:06:02.040 --> 0:06:04.280 your life. Indeed, this is definitely a topic that will 0:06:04.360 --> 0:06:08.800 change the way you think about everything from salary negotiations 0:06:08.839 --> 0:06:13.599 to just haggling at the market totally. Yeah. Uh, and 0:06:13.680 --> 0:06:17.520 not just economic matters too, I want to uh, though 0:06:17.520 --> 0:06:21.880 it's mostly been tested in terms of estimating numbers, and 0:06:22.080 --> 0:06:25.720 especially economic type numbers, prices, things where you're trying to 0:06:25.800 --> 0:06:30.680 determine a reasonable figure for something. I would posit that 0:06:30.720 --> 0:06:33.800 I think it's very likely this type of thinking also 0:06:34.000 --> 0:06:37.839 biases all kinds of judgments we make, such as judgments 0:06:37.839 --> 0:06:41.719 of people's reputations, judgments of the confidence we place in 0:06:41.760 --> 0:06:44.480 the outcomes of events, all of which is going to 0:06:44.560 --> 0:06:47.560 be enormously important for the rest of your life in 0:06:47.800 --> 0:06:51.560 myriad ways. Yeah. Though certainly a lot of the more 0:06:51.600 --> 0:06:55.800 like readily available examples are gonna involve economics. They're gonna 0:06:55.800 --> 0:06:58.919 involve things like massive discounts. How can you do you 0:06:58.920 --> 0:07:02.960 remember deep discount vds? Deep discount DVDs or I guess 0:07:02.960 --> 0:07:05.039 it was deep discount DVD. I think it was a 0:07:05.040 --> 0:07:08.919 website that had it's time in the sun there with 0:07:08.920 --> 0:07:12.840 with deeply discounted DVDs. And it seems like everybody I 0:07:12.960 --> 0:07:15.120 knew we were just like, oh my goodness, these deals 0:07:15.120 --> 0:07:17.760 are too good. You're practically you're losing money if you 0:07:17.880 --> 0:07:20.240 don't order these movies. Right. The more you buy, the 0:07:20.280 --> 0:07:23.560 more you save. And it's easy to fall into that mentality. 0:07:23.600 --> 0:07:25.760 It's like I didn't really want to pick up this 0:07:25.920 --> 0:07:28.320 video game or this movie or this book, but when 0:07:28.320 --> 0:07:31.760 you slice the price that much, I guess I'll bite. Yeah, man, 0:07:32.040 --> 0:07:35.480 seems irrational, right. But back to the questions I asked earlier, 0:07:35.760 --> 0:07:38.320 what what age did Marie Curry die? How much was 0:07:38.320 --> 0:07:41.920 Sean Connery paid for Highlander two? I actually did a brief, 0:07:42.280 --> 0:07:45.760 non scientific email survey. I say non scientific because these 0:07:45.760 --> 0:07:49.920 were very small samples, not truly random. I just basically 0:07:50.080 --> 0:07:54.760 randomly emailed coworkers UH in two different groups and asked 0:07:54.760 --> 0:07:57.200 them to estimate answers to those questions. Now, I had 0:07:57.240 --> 0:08:00.600 Group A where I just asked them how old did 0:08:00.600 --> 0:08:03.040 you think Marie Curry was when she died? And how 0:08:03.120 --> 0:08:05.240 much do you think Sean Connery got paid for highland 0:08:05.320 --> 0:08:09.520 Er two? No anchors, right, no starting numbers higher or 0:08:09.520 --> 0:08:14.760 lower than And in that group, the average answer that 0:08:14.800 --> 0:08:17.200 people gave was that they thought that Marie Cury died 0:08:17.240 --> 0:08:20.440 at fifty three, and they thought that Sean Connery got 0:08:20.480 --> 0:08:23.720 paid three point two million. Three point that was there. 0:08:24.040 --> 0:08:27.440 That was their answer, without any anchoring, right, without any anchoring. 0:08:27.480 --> 0:08:29.680 So that's very close, very close to the three point 0:08:29.720 --> 0:08:32.599 five if that website is correct. Who knows? Then Group B, 0:08:32.960 --> 0:08:35.679 I did the same anchors I just gave you. So 0:08:35.920 --> 0:08:39.480 I asked them, did she die older? Younger than twenty seven? 0:08:39.640 --> 0:08:42.360 What age did she die? The average answer for that 0:08:42.400 --> 0:08:47.559 group was forty eight point three good bit lower than yeah. 0:08:48.120 --> 0:08:51.040 And then also I did the same thing, I said, uh, 0:08:51.440 --> 0:08:54.400 higher or lower than thirty one million for Sean Connery. 0:08:54.559 --> 0:08:58.640 Average guests in Group B was that Sean Connery got 0:08:58.640 --> 0:09:02.160 paid nineteen point three million dollars uncle that I wasn't 0:09:02.160 --> 0:09:06.840 alone to be for Islander to nineteen point three million. 0:09:07.440 --> 0:09:09.679 And these are these are co workers, These are smart people, 0:09:10.320 --> 0:09:12.480 you know, they should be good at making estimates of 0:09:12.520 --> 0:09:14.360 these kind of things off the top of their head. 0:09:14.760 --> 0:09:19.120 But in this non scientific way, I feel like we've 0:09:19.160 --> 0:09:22.720 just demonstrated that just putting a number out there, even 0:09:22.720 --> 0:09:26.120 if the number is totally unreasonable, and Mary cuy didn't 0:09:26.120 --> 0:09:29.200 die at twenty seven, what Sean Connery did not get 0:09:29.280 --> 0:09:33.679 thirty one million for this movie in that doesn't make 0:09:33.679 --> 0:09:36.320 any sense. But even if you put these unreasonable numbers 0:09:36.360 --> 0:09:40.680 out there, they seem to bias people's answers toward the 0:09:40.760 --> 0:09:44.280 numbers you've thrown out. Well, it really takes me back 0:09:44.320 --> 0:09:48.240 to like pop quizzes in grade school tests, right, and 0:09:48.320 --> 0:09:52.160 the saying the famous adage the answer is in the question, 0:09:52.679 --> 0:09:54.720 Because what do you do if you don't really know 0:09:54.760 --> 0:09:57.120 the answer? Will you have? It's multiple choice? You look 0:09:57.120 --> 0:09:59.160 at the available answers and answers and see which one 0:10:00.000 --> 0:10:02.560 each is out to you the most, which one feels 0:10:02.600 --> 0:10:06.360 true or stirs your memory? And then failing that, you 0:10:06.440 --> 0:10:08.840 look to the question itself. Is there some sort of 0:10:08.880 --> 0:10:13.480 information in the question? Uh? Essentially you're looking for like 0:10:13.520 --> 0:10:16.040 a leak in the question. You're looking for a flaw 0:10:16.480 --> 0:10:21.800 in the in the Riddler's strategy. Yeah, there's test taking skills, 0:10:22.000 --> 0:10:25.720 which are essentially meta test taking skills. They are skills 0:10:25.760 --> 0:10:28.360 that are not really about the subject of the test, 0:10:28.480 --> 0:10:33.080 but skills at determining how to interrogate the style and 0:10:33.160 --> 0:10:36.400 format of a test to exploit it for better scores 0:10:36.440 --> 0:10:38.880 in the end. Right. But then I also think there's 0:10:39.000 --> 0:10:41.800 there's also kind of a social connotation to this as well. 0:10:41.840 --> 0:10:44.680 Like an example would be, you have a friend who 0:10:44.679 --> 0:10:47.280 comes up and says, hey, man, have you heard this 0:10:47.400 --> 0:10:49.960 latest album by I don't know name an active band 0:10:50.480 --> 0:10:54.280 Kansas Kansas. Have you heard this new album by Kansas? 0:10:54.280 --> 0:10:57.600 How awesome is that album? Man? So now I have 0:10:57.679 --> 0:11:00.640 to I have to frame my answer around awesome? Is 0:11:00.640 --> 0:11:05.480 it pretty awesome? Super awesome? It was okay, reasonably awesome. 0:11:05.559 --> 0:11:07.640 When you say it was okay, what that means is 0:11:07.720 --> 0:11:10.720 you hated it, But you have to adjust up to 0:11:10.760 --> 0:11:13.839 the fact that they started with how awesome is it? Right? 0:11:13.880 --> 0:11:15.800 And this is a case though, where it's it's not 0:11:15.840 --> 0:11:19.920 a situation where you're gonna appear stupid or or uninformed 0:11:19.920 --> 0:11:22.040 on a topic unless you know, except on the topic 0:11:22.040 --> 0:11:24.880 of Kansas. Maybe it's not a situation where you have 0:11:24.920 --> 0:11:27.439 any monetary steaks, but there is kind of like a 0:11:27.480 --> 0:11:30.680 social steak employ there. If your friend is a huge 0:11:30.800 --> 0:11:33.240 Kansas fan. You don't want to say, oh, I think 0:11:33.320 --> 0:11:37.800 Kansas is awful. You want to adjust your answer so 0:11:37.840 --> 0:11:44.800 that it's the appropriate balance of truth and uh in politeness. Yeah, So, 0:11:44.880 --> 0:11:47.360 in the same way that my email survey was not 0:11:47.400 --> 0:11:50.280 really scientific, what we're talking about. These examples are not 0:11:50.320 --> 0:11:52.920 really scientific either. They're just anecdotes, and they've got all 0:11:52.960 --> 0:11:56.959 these contaminating factors like you're saying Kansas, well, like social 0:11:57.040 --> 0:11:59.960 social dynamics, like you were just explaining, so you respond, 0:12:00.000 --> 0:12:04.120 it might not be truly influenced by just the presence 0:12:04.160 --> 0:12:06.640 of the word awesome as much as it is by 0:12:06.640 --> 0:12:08.760 the fact that you're trying to maintain a relationship with 0:12:08.760 --> 0:12:10.880 the person who said this, you know what I mean. 0:12:11.200 --> 0:12:15.679 So it's not divorced of this contaminating context. Now, the 0:12:15.760 --> 0:12:18.320 anchoring effect that we're going to be talking about today 0:12:18.400 --> 0:12:23.200 has been thoroughly demonstrated in fully scientific context, So it's 0:12:23.280 --> 0:12:27.120 not always just this social kind of stuff going on. Uh. 0:12:27.559 --> 0:12:29.760 You can test it ten ways to Sunday, and it 0:12:29.840 --> 0:12:33.719 has been tested not just ten a million ways to Sunday, 0:12:33.760 --> 0:12:38.080 and this thing works. This anchoring effect is a known 0:12:38.960 --> 0:12:42.680 robust exploit of the human mind that works almost all 0:12:42.679 --> 0:12:46.280 the time it is. It is scary how often it works. Yeah, 0:12:46.280 --> 0:12:49.200 there are no shortage of papers about this. Uh, that's 0:12:49.200 --> 0:12:51.280 for sure. Now, I guess we should try to define 0:12:51.280 --> 0:12:53.960 it just a little bit more so to define the 0:12:54.000 --> 0:12:56.760 anchoring effect. It is an example of what's known as 0:12:56.800 --> 0:12:59.960 a cognitive heuristic. And if you're like me, I can remember. 0:13:00.280 --> 0:13:02.040 I think back when I was in college, I went 0:13:02.080 --> 0:13:04.760 a long time hearing the word heuristic and just sort 0:13:04.800 --> 0:13:07.720 of nodding without really knowing what it meant. Anytime you 0:13:07.760 --> 0:13:10.280 hear the word heuristic, you can just substitute the phrase 0:13:10.720 --> 0:13:14.640 rule of thumb or mental shortcut. I still picture a 0:13:14.640 --> 0:13:18.880 hair shirt, no matter what I mean. Cans like that 0:13:19.120 --> 0:13:20.880 because you just kind of you ever have words like 0:13:20.920 --> 0:13:24.040 that where it's completely illogical, but you can't help but 0:13:24.280 --> 0:13:26.680 picture this thing in your head. I have no idea why, 0:13:26.920 --> 0:13:29.840 like I tend to imagine a philosopher in a hair shirt. 0:13:30.120 --> 0:13:34.480 Melissandra put on her rough spun heuristic pretty much. But 0:13:34.600 --> 0:13:37.240 in reality, a heuristic is a rule of thumb or 0:13:37.280 --> 0:13:41.440 a mental shortcut. It's essentially a fast and easy process 0:13:41.559 --> 0:13:44.000 that your brain uses to come up with some kind 0:13:44.000 --> 0:13:48.040 of output. You need a piece of information or a 0:13:48.160 --> 0:13:51.560 judgment about something, and you don't really have time to 0:13:51.640 --> 0:13:54.920 sit down and work out all the details, so instead 0:13:54.960 --> 0:13:58.280 you use a heuristic. And heuristics can lead to relatively 0:13:58.360 --> 0:14:01.480 good output. Sometimes you're good it at a fast and 0:14:01.559 --> 0:14:03.920 loose judgment on the fly, or they can lead to 0:14:03.960 --> 0:14:07.400 relatively bad output. And there are all kinds of heuristics 0:14:07.400 --> 0:14:10.839 we use. One example of an extremely common and extremely 0:14:10.920 --> 0:14:14.960 bad heuristic is judging some what you think of somebody 0:14:15.000 --> 0:14:18.840 by how they look. Extremely common heuristic. It's a shortcut. 0:14:19.080 --> 0:14:21.040 You don't want to do the work of like talking 0:14:21.080 --> 0:14:23.920 to them for hours and figuring out, you know, what 0:14:23.960 --> 0:14:26.640 you really think about them and their reliability as a 0:14:26.680 --> 0:14:29.520 person and their values and all that. So instead you 0:14:29.520 --> 0:14:32.280 can just look at them and make a crude judgment. 0:14:32.600 --> 0:14:35.200 This is a great example because it's also a process 0:14:35.240 --> 0:14:39.000 that is not necessarily taking place at the surface level 0:14:39.040 --> 0:14:42.520 of of cognition. It's implicit as opposed to explicit. Yeah, 0:14:42.520 --> 0:14:44.560 it very often is. And so this is like one 0:14:44.600 --> 0:14:48.680 of these really bad heuristics that we're just plagued by. Uh, 0:14:48.720 --> 0:14:52.120 you know, it's everybody should recognize it's a destructive way 0:14:52.120 --> 0:14:54.760 of thinking that it's not really good for society. That 0:14:54.800 --> 0:14:57.160 people do it, but people just keep doing it because 0:14:57.360 --> 0:15:00.000 they're naturally vulnerable to it. It's like taking a short 0:15:00.040 --> 0:15:02.720 cut through the woods. It makes sense unless there's a 0:15:02.760 --> 0:15:06.200 monster there, or it's rain or you get lost. Um. 0:15:06.240 --> 0:15:07.560 I mean really, that can be said about a lot 0:15:07.560 --> 0:15:09.760 of shortcuts. So when we call them shortcuts, they can 0:15:09.800 --> 0:15:11.480 help you help you out in the short term. But 0:15:11.560 --> 0:15:14.240 if everybody does it, it breaks the system, or if 0:15:14.280 --> 0:15:16.160 you do it too often, you're more likely to run 0:15:16.240 --> 0:15:20.560 up against the pitfalls of taking that shortcut. Another bad heuristic, 0:15:20.600 --> 0:15:23.640 of course, is the anchoring heuristic, the one we're talking 0:15:23.680 --> 0:15:26.720 about today. Uh. It might not be bad in every 0:15:26.720 --> 0:15:29.880 single case, because maybe in some off chance it will 0:15:29.960 --> 0:15:33.120 bias you toward a correct answer. But most of the time, 0:15:33.680 --> 0:15:37.120 the way the anchoring heuristic is going to be deployed 0:15:37.160 --> 0:15:39.360 in your life is by people who are trying to 0:15:39.400 --> 0:15:44.680 get you negotiated toward their position on something, and they 0:15:44.680 --> 0:15:47.680 will use the anchoring bias in order to exploit your 0:15:47.720 --> 0:15:51.480 mind and make you come closer to a position that 0:15:51.520 --> 0:15:54.720 benefits them. Right. So again, this is haggling for something 0:15:54.720 --> 0:16:00.160 at a marketplace. This is negotiations over a contract. After 0:16:00.280 --> 0:16:02.480 what have you exactly right, So I think we should 0:16:02.480 --> 0:16:04.080 take a quick break, and then when we come back 0:16:04.120 --> 0:16:07.000 we will discuss the origins of the idea of anchoring 0:16:07.440 --> 0:16:11.640 and some research in psychology and behavioral economics on how 0:16:11.680 --> 0:16:17.080 it applies. Thank alright, we're back. I should mention that 0:16:17.120 --> 0:16:20.040 one of our main resources in discussing the anchoring effect 0:16:20.080 --> 0:16:23.080 is a two thousand eleven literature review from the Journal 0:16:23.120 --> 0:16:28.440 of Socioeconomics by Adrian Fernham and Hua Cheu Boo, which 0:16:28.480 --> 0:16:31.160 collects and synthesizes all of the major research on the 0:16:31.160 --> 0:16:34.560 subject over the past forty years or so up until 0:16:34.560 --> 0:16:37.040 about two thousand eleven. This paper is a great resource. 0:16:37.080 --> 0:16:39.040 It puts it all in one place, and so that's 0:16:39.040 --> 0:16:41.200 going to be sort of our guide for discussing it 0:16:41.240 --> 0:16:44.200 as we go. One question is where does the idea 0:16:44.240 --> 0:16:46.960 of anchoring come from. Obviously people have been using it 0:16:47.000 --> 0:16:50.440 before it was understood and codified as a principle in 0:16:50.520 --> 0:16:55.760 behavioral economics, right, But the anchoring and adjustment effect was 0:16:55.880 --> 0:17:01.200 most influentially described and articulated by Tversky and Conomon in 0:17:01.400 --> 0:17:04.959 nineteen seventy four, and according to them, it is quote 0:17:05.119 --> 0:17:10.040 the disproportionate influence on decision makers to make judgments that 0:17:10.119 --> 0:17:15.840 are biased toward and initially presented value. So what that means, 0:17:15.880 --> 0:17:18.359 in effect, is that when we're trying to make a 0:17:18.400 --> 0:17:22.399 reasonable guess or a judgment about something, any piece of 0:17:22.480 --> 0:17:26.879 information you get before you make the judgment is likely 0:17:26.920 --> 0:17:30.359 to bias your thinking in the direction of that piece 0:17:30.359 --> 0:17:33.560 of information. So, if you're shown a car and asked 0:17:33.560 --> 0:17:36.160 how much you would pay for it, you you might say, what, 0:17:36.520 --> 0:17:38.920 I don't know, ten thousand dollars. That seems about right. 0:17:39.560 --> 0:17:42.240 But let's say instead you are shown the same car 0:17:42.440 --> 0:17:46.040 with the price sticker on it that says sixteen thousand dollars. 0:17:46.440 --> 0:17:49.760 According to the anchoring and adjustment hypothesis here, you would 0:17:49.800 --> 0:17:52.560 be more likely in this scenario to offer more for 0:17:52.640 --> 0:17:55.120 the car, more than you would have if you just 0:17:55.280 --> 0:17:57.560 saw the car and tried to think, how much would 0:17:57.600 --> 0:18:00.480 that be worth to me? Because now, oh, now that 0:18:00.520 --> 0:18:02.720 it has a sixteen thousand dollar price tag, I think 0:18:02.720 --> 0:18:06.200 maybe it looks worth about twelve thousand. You're still coming 0:18:06.240 --> 0:18:09.359 down from the offer, but the offer has biased up 0:18:09.480 --> 0:18:13.399 your initial judgment of how much it's worth, or, in 0:18:13.440 --> 0:18:16.720 other words, the anchor of the initial price has adjusted 0:18:16.800 --> 0:18:19.639 your offer higher than you naturally be willing to pay 0:18:19.680 --> 0:18:22.639 if that price hadn't been presented to you. It's kind 0:18:22.680 --> 0:18:25.400 of like if you have a ticket for a concert 0:18:25.480 --> 0:18:27.280 and then you realize you can't go, and so you 0:18:27.320 --> 0:18:29.920 try to sell that ticket, just you know, online to 0:18:30.000 --> 0:18:33.920 some friends. Maybe you'll often include how much you paid 0:18:33.960 --> 0:18:36.800 for it and and what you're really saying there is 0:18:37.359 --> 0:18:40.000 I paid thirty bucks for this ticket, so I'll take 0:18:40.040 --> 0:18:42.240 whatever I can get. But either closer you get to 0:18:42.320 --> 0:18:45.720 thirty the better. You're not a Yeah, you're not asking 0:18:45.840 --> 0:18:48.400 how much is it worth for you to see Kansas. 0:18:48.920 --> 0:18:51.840 You're saying, given that I paid five hundred dollars for 0:18:52.040 --> 0:18:55.119 front row seats to Kansas, how close can you get 0:18:55.160 --> 0:18:58.159 to that that number. I have no idea how much 0:18:58.240 --> 0:19:01.560 Kansas tickets actually cost. I assume their mega and demand. 0:19:01.640 --> 0:19:04.840 But by simply mentioning five hundred dollars, you made me 0:19:04.880 --> 0:19:07.639 think about anything. Well, you know they're Kansas. I I 0:19:07.680 --> 0:19:11.120 know of Kansas, so they're a big enough name. Uh, 0:19:11.119 --> 0:19:12.960 it makes sense that someone would pay a lot of 0:19:13.000 --> 0:19:16.080 money for a first row experience. You know, we're dust 0:19:16.119 --> 0:19:18.280 in the wind, we only live once. You might as 0:19:18.320 --> 0:19:21.080 well go see Kansas, even if it costs a pretty penny. Yeah, 0:19:21.160 --> 0:19:24.120 it's crazy, Like you said, just how just through observation 0:19:24.200 --> 0:19:27.800 you can tell how powerful this this, the anchoring phenomenon. 0:19:27.840 --> 0:19:29.840 It actually is right, But we don't have to go 0:19:29.880 --> 0:19:33.280 anecdotal because this has been proved up down, left, right, 0:19:33.359 --> 0:19:39.000 sideways to Wichita and back. Uh. It is a thoroughly, 0:19:39.119 --> 0:19:43.159 thoroughly demonstrated principle. Our minds just work this way, and 0:19:43.200 --> 0:19:47.119 so there are some qualifications. The anchoring bias can be 0:19:47.359 --> 0:19:50.720 affected by some variables, we think, and there is actually 0:19:50.800 --> 0:19:55.159 debate over what explains the reason behind it, why it 0:19:55.280 --> 0:19:58.720 happens in different scenarios. But what there's really no debating 0:19:58.840 --> 0:20:01.320 is that it happens. This is This has proven a 0:20:01.359 --> 0:20:05.440 million ways, and it is. It is considered a thoroughly 0:20:05.640 --> 0:20:08.560 robust bias and a fundamental part of how the human 0:20:08.600 --> 0:20:10.920 brain works. Yes, as you said, it said there are 0:20:10.920 --> 0:20:13.080 no shortage of papers to back this up. I would 0:20:13.080 --> 0:20:15.600 say that one of the problems is that these are 0:20:15.600 --> 0:20:19.000 some of the stuffiest academic papers you could hope to read. 0:20:19.640 --> 0:20:24.080 I mean, they're they're breaking apart a phenomenous best studied 0:20:24.240 --> 0:20:29.000 through numbers and figures and estimates on value. So it's 0:20:29.040 --> 0:20:32.000 not as sexy as you have somebody in a room 0:20:32.040 --> 0:20:34.520 pulling a lever to shock somebody in the next room. 0:20:34.560 --> 0:20:37.920 You know. I feel like maybe maybe what anchoring needs 0:20:38.440 --> 0:20:42.200 is like one really good but kind of superficial study 0:20:42.320 --> 0:20:44.240 that's just based on saying, how much do you think 0:20:44.280 --> 0:20:47.000 Tom Cruise was paid for this film? Something that will 0:20:47.040 --> 0:20:51.520 get that will generate headlines that will be uh relatable 0:20:51.520 --> 0:20:54.520 in a slightly different way, and that could help explain 0:20:54.600 --> 0:20:57.959 anchoring more to the general public. Yeah, it's like a 0:20:58.000 --> 0:21:02.080 popular sensational demons stration, but it's been demonsted. I mean, 0:21:02.119 --> 0:21:03.960 part of the problem is you don't need to demonstrate 0:21:03.960 --> 0:21:08.040 it anymore. It's been demonstrated with these like hundreds of questions. 0:21:08.040 --> 0:21:13.680 It's been demonstrated on right, what is the freezing point 0:21:13.720 --> 0:21:17.040 of vodka? That's one that they ask people. Uh makes 0:21:17.040 --> 0:21:21.000 a difference there. What is the height of Mount Everest? Uh? 0:21:21.040 --> 0:21:25.080 What age was Amelia Earhart when she disappeared attempting to 0:21:25.119 --> 0:21:27.600 pilot a plane around the world. So they're just all 0:21:27.640 --> 0:21:31.040 these studies that ask questions like this and use anchoring 0:21:31.400 --> 0:21:35.040 to bias the answers of participants. But it also works 0:21:35.040 --> 0:21:38.760 in things other than just like giving a basic informational 0:21:38.880 --> 0:21:41.120 guess about something. That's what we've been doing so far, 0:21:41.240 --> 0:21:44.040 Like you know, can you guess a fact about history? 0:21:44.480 --> 0:21:50.000 It also works in contexts like what percent chance would 0:21:50.040 --> 0:21:53.800 you give of a thing happening? What's the percent chance 0:21:53.800 --> 0:21:56.040 you would give of a certain athlete scoring a certain 0:21:56.119 --> 0:21:59.200 number of points in an upcoming game. So it influences 0:21:59.600 --> 0:22:03.080 our judgments of probabilities. Yes, we certainly see this in 0:22:03.200 --> 0:22:07.479 political elections, for instance, Absolutely numbers thrown out what are 0:22:07.480 --> 0:22:10.520 the chances of this particular candidate winning, and then you 0:22:10.640 --> 0:22:15.600 end up adjusting your expectations of the future based on 0:22:15.760 --> 0:22:19.800 those percentages. Yeah, and so those percentages could be based 0:22:19.840 --> 0:22:21.960 on something in reality. I mean, like if you're looking 0:22:22.040 --> 0:22:25.879 at good, well conducted poll data that's reflecting information about 0:22:25.920 --> 0:22:28.440 reality that you might want to adjust according to that, right, 0:22:28.680 --> 0:22:32.040