ECONOMICS
DECISION MAKING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The level of plausibility of an anchor had no significant effect on its effect on the participants’ judgement.
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Low value anchors have a greater effect than high value anchors.
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High plausibility anchorse have a greater effect than low plausibility anchors.
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High value anchors have a greater effect than low value anchors.
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Detailed explanation-1: -Which of the following is a correct statement of the findings of Strack and Mussweiler’s (1997) study of anchoring bias? Low value anchors have a greater effect than high value anchors.
Detailed explanation-2: -They found that high anchors led to higher absolute judgements than did low anchors. They also found that the anchoring effect took place for plausible and implausible anchors. They also revealed that the implausible anchors were at least as effective as plausible ones.
Detailed explanation-3: -Gandhi and the Anchoring Effect (Strack and Mussweiler, 1997) This study shows that numbers that are impossibly linked to the target question can still have an effect. Their aim was to see how the anchoring effect could influence guesses of Mahatma Gandhi age when he died.
Detailed explanation-4: -What is Anchoring Bias? Anchoring bias occurs when people rely too much on pre-existing information or the first information they find when making decisions. For example, if you first see a T-shirt that costs $1, 200 – then see a second one that costs $100 – you’re prone to see the second shirt as cheap.
Detailed explanation-5: -Loss aversion/endowment effect Loss aversion is the tendency for people to strongly prefer avoiding losses than obtaining gains.