ADMS 2511 Lecture Notes - Lecture 23: Anchoring, Jury Trial
1 May 2018
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ADMS 2511 Lecture 23 Notes – Anchoring Bias
Introduction
• When we are given factual questions and asked to judge the probability that our
answers are correct, we tend to be overly optimistic.
• This is known as overconfidence bias.
• In a study of confidence intervals (educated guesses about some characteristic of a
population), when people said they were 90 percent confident that their answers were
correct, their answers were correct only about 50 percent of the time—and experts
were no more accurate in their estimation of confidence intervals than were novices.
• Individuals whose intellectual and interpersonal abilities are weakest are most likely to
overestimate their performance and ability.
• Also, a negative relationship exists betee etrepreeurs’ optiis ad perforae
of their new ventures: the more optimistic, the less successful.
• The tendency to be too confident about their ideas might keep some from planning how
to avoid problems that arise.
• Overconfidence is most likely to surface when organizational members are considering
issues or problems that are outside their area of expertise.
• The anchoring bias is a tendency to fixate on initial information and fail to adequately
adjust for subsequent information.
• It occurs because the mind appears to give a disproportionate amount of emphasis to
the first information it receives.
• Anchors are widely used by people in professions where persuasion skills are
important—such as advertising, management, politics, real estate, and law.
• For istae, i a ok jur trial, the plaitiff’s attore asked oe set of jurors to ake
an award in the range of $15 million to $50 million.
• The plaitiff’s attore asked aother set of jurors for a aard i the rage of $50
million to $150 million.
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