Anchoring & Adjustment


This article is an extract from my book ‘The Brain-Based Boss’

Amos Tversky and Daniel Kahneman have done several studies on this heuristic where people overly and disproportionately rely on one piece of information (or ‘anchor’) when making a decision or engaging in a behaviour. Once the anchor is set, there is a bias toward adjusting or interpreting other information to reflect the anchored information. Through this cognitive bias, the first information learned about a subject can affect future decision-making. (Warning to those averse to the touchy feelies – many anchors originate in your childhood. Thanks Mum.)

Kahneman writes of a study done at the San Francisco Exploratorium. Visitors were surveyed about their guesses of the height of the world’s tallest redwood tree. They were each asked two questions. The second question was always, “What’s your best guess of the height of the world’s tallest redwood tree?” but the first question varied. It was either, “Is the height of the world’s tallest redwood tree more or less than 1200 feet?” or “Is the height of the world’s tallest redwood tree more or less than 180 feet?”


Anchor In Their 1st Question Average Guess In Feet
1200 844
180 282


Clearly there is anchoring and adjustment going on but how great is the effect? The difference between the two average guesses was 844-282=562. The difference between the two anchors was 1200-180=1020. 562 divided by 1020 is 55%. That’s the significant anchoring effect in this instance.

Another study looked at whether the original listing price for houses in the real estate market affected expert’s assessment of the houses’ actual market values. Because researchers like a laugh as much as the next person, they studied a group of real estate agents versus a control group of random students with zero housing experience. The anchoring effect for the students was 48%. The anchoring effect for the realtors was 41%. The delightful conclusion wasn’t just in those numbers. When told of their results and then having the anchoring effect explained to them, the students accepted it. The realtors vehemently denied it. That kind of close-mindedness does not lend itself to personal or professional development and long-term success. You might want to bear that in mind yourself.

Feedback is important here. Realtors don’t get much and it’s a long time coming. ‘Calibration’ is the balance between your real and perceived abilities. Young male drivers, on average, have very poor calibration between their real and perceived driving abilities. According to Joseph Hallinan, weather forecasters have excellent ‘calibration.’ The reason for this is the quantity and quality of feedback they get. Everyone is willing and able to let weather forecasters know when they’re wrong. Young male drivers are long gone from much of the mayhem they cause thus avoiding feedback until they’re not and then it’s too late.


This article is an extract from my book ‘The Brain-Based Boss’

Learn how to move people towards change at

More ideas at

Signup to one email per month summarising these blog posts.

About Terry Williams - The Brain-Based Boss

I'm all about engaging people and helping you engage yours to influence behaviour to improve results - at work and at home. Maybe you're a manager, a salesperson, a leader, a parent, a presenter or an event organiser? You need to grab your people's attention, create some rapport, be memorable and influence behaviour change. How can we do that? I'm originally a trainer by trade, turned manager, turned comedian and partway back again. Author of 'THE GUIDE: How to kiss, get a job & other stuff you need to know', I write and speak about how to engage people, be they employees, family or yourself. How can we connect with people’s own internal motivations and help them use their own inner passions to drive towards productivity, success and happiness? And hopefully have a few laughs along the way... As a trainer facilitating learning and development in others, I find myself drawing on my own extensive business experience. I specialise in the delivery of high impact, customised training solutions for organisations that are serious about improving the performance and lives of their people.

Posted on May 22, 2018, in Employee Engagement. Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: