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Number Magic: Why a simple number can change your decision-making?
In our daily lives and business decisions, numbers play a role that cannot be ignored. Sometimes, the guidance of numbers can distort our judgment and choices. This phenomenon is called the "anchoring effect." It describes the irrational behavior of people who are influenced by a certain reference point (i.e., "anchor") when facing decisions. Especially under the influence of numbers, this effect is even more significant. Whether it is a discussion about salary promotion, price discussion, or other scenarios that require prediction, numbers may become an "anchor" in our consciousness and affect the final decision.
Experiments time and time again have proven that whether it is business negotiations or decisions in life, the influence of numbers often exceeds our expectations.
The origin and mechanism of anchoring effect
The anchoring effect was first studied by psychologists Amos Tversky and Daniel Kahneman. They found that when participants were given an initial number (regardless of whether the number was reasonable or not), their subsequent Estimates tend to be significantly affected by this number. Their experiments showed that when asked to calculate the product of 1 to 8, participants' final estimates differed significantly depending on their initial numbers. When the initial number is small, the estimated result is low; conversely, when the initial number is large, the estimated result is high.
The application of anchoring effect in the business field
The anchoring effect is particularly important in business negotiations and price setting. When one party proposes a price as an initial offer, that price becomes the "anchor" in the negotiation. For example, when a salesperson is showing a car and mentions that there is a more expensive car next to it, this action causes the consumer to mentally compare it with the price of his or her own car. However, this comparison may actually lead them to underestimate the value of the latter and end up making unexpected decisions.
The "first impression" in business negotiations is often closely related to the anchoring effect, because it can affect the offers and expectations of both parties.
Inspiration from the experiment
Further research also shows that the anchoring effect not only exists in the business field, but also affects our decision-making in daily life. In an experiment on Social Security numbers, participants used the last two digits of their Social Security numbers as anchors when auctioning items, and participants with higher numbers bid significantly higher than those with lower numbers. The existence of anchoring effect is proved.
How to reduce the impact of anchoring effect
Although the anchoring effect is inevitable, there are strategies you can employ to reduce its impact. Research shows that considering opposing viewpoints (Consider-the-opposite strategy) can help offset the impact of initial judgments. This means that before making a decision, one should reflect on the initial information and unearth possible opposing viewpoints. This type of strategy can effectively help people break out of anchoring patterns and improve decision-making quality.
Research shows that while being aware of the anchoring effect can still influence decisions, we can improve the accuracy of our judgments by considering other possibilities.
The Magic of Numbers: Deeper Thoughts
As we deepen our understanding of psychology, especially the increasing research on anchoring effects, the mystery of numbers becomes clearer. This is not just a simple mathematical operation, but a subtle aspect of human thinking. How do numbers write personal narratives in our psyches, influencing our choices and judgments? As more research emerges, perhaps we will be able to find a more comprehensive explanation for this problem.
In such an era of rapid digital development, should we rethink the role and influence of digital in our lives?
