Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 56 , 01 December 2023
Open
Access | Article
Three Applications of the Anchoring Effect
* Author to whom correspondence should be addressed.
Abstract
To find out the relationship between psychology and economics, many people try to study the reasons that lead people to make choices. This paper aims to explain the influence of the “anchoring effect” in behavioural economics on consumption, investment, and food intake. Through reading the previous literature review and the experiments, and based on the definition of the anchoring effect in Thinking Fast and Slow by Daniel Kahneman, three real-life applications of the anchoring effect were identified. In the anchoring effect in consumption, investment, and food intake, the anchoring price is proportional to people’s price estimates. Anchors can be divided into high anchor conditions and low anchor conditions in those cases. However, possible biases in some of the experiments mentioned in some of the citations and related solutions are also mentioned. In a complete decision-making process, people’s choices will be influenced by multiple anchors, and those anchors are always related to each other.
Keywords
anchoring, consumption, investment, food intake
References
1. Zong, Yi, and Xiaojie Guo. “An Experimental Study on Anchoring Effect of Consumers’ Price Judgment Based on Consumers’ Experiencing Scenes.” Frontiers, Frontiers, 7 Jan. 2022, www.frontiersin.org/articles/10.3389/fpsyg.2022.794135/full.
2. Kahneman, D(25 October 2011). Anchor. Thinking fast and slow.p.119.
3. Neto,J.C., Filipe.J.A.,Ramalheiro. and B. “Neuromarketing: Consumers and the Anchoring Effect”.Int. J Latest Trends Fin.Eco. Sc.Vol-1 No.4 December, 2011 Available at: https://repositorio.iscte-iul.pt/bitstream/10071/14171/1/Neuromarketing%20Consumers%20and%20the%20Anchoring%20Effect.pdf
4. Shan, L., Diao, H., & Wu, L. (2020). Influence of the framing effect, anchoring effect, and knowledge on consumers’ attitude and purchase intention of organic food. Frontiers in Psychology, 11. Available at: https://doi.org/10.3389/fpsyg.2020.02022
5. Kaur, G. (1 June 2022). 14 anchoring examples in real life. StudiousGuy. Available at:https://studiousguy.com/anchoring-examples-in-real-life/
6. Zhu, S. (2022). Anchoring effect in capital market. Highlights in Business, Economics and Management, 1, 66–70. Available at: https://doi.org/10.54097/hbem.v1i.2320
7. Metcalfe, R., & Dolan, P. (2012). Behavioural economics and its implications for transport. Journal of Transport Geography, 24, 503–511. Available at: https://doi.org/10.1016/j.jtrangeo.2012.01.019
8. Ku, G., Galinsky, A. D., & Murnighan, J. K. (2006). Starting low but ending high: A reversal of the anchoring effect in auctions. Journal of Personality and Social Psychology,90(6), 975–986. Available at: https://doi.org/10.1037/0022-3514.90.6.975
9. Marchiori, D., et, al. “The portion size effect on food intake. An anchoring and adjustment process?”Appetite, 2014, p.108. Available at: https://healthycognitionlab.org/wp-content/uploads/2016/02/2014_Marchiori_Papies_Klein_Appetite_PSE_anchoring.pdf
10. Roberto, C. A., & Kawachi, I. (2014). Use of psychology and behavioral economics to promote healthy eating. American Journal of Preventive Medicine, 47(6), 832–837. Available at: https://doi.org/10.1016/j.amepre.2014.08.002
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).
- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-159-9
- ISBN (Online)
- 978-1-83558-160-5
- Published Date
- 01 December 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/56/20231068
- Copyright
- 01 December 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited