Ankereffekt

What Is Ankereffekt?

The Ankereffekt, or anchoring effect, is a cognitive bias where an individual's decision-making is disproportionately influenced by the first piece of information received, known as the "anchor." This initial piece of information, even if irrelevant, serves as a reference point against which subsequent judgments are made. A core concept within behavioral finance, the Ankereffekt highlights how seemingly arbitrary numbers can impact perceptions of value, price, and other estimations, often leading to less rational outcomes. It is a powerful heuristic that can affect various aspects of financial and personal life.²⁴

History and Origin

The concept of anchoring was first demonstrated in a 1958 study on psychophysics by Muzafer Sherif, Daniel Taub, and Carl Hovland, who called it the “assimilation effect” when researching how initial numbers influenced estimates of objects' weights. How²³ever, the term "anchoring effect" became widely recognized due to the groundbreaking research of psychologists Daniel Kahneman and Amos Tversky in the 1970s. Their work revealed the profound and often irrational impact of initial information on subsequent judgments, even when participants were aware of the irrelevance of the anchor. For²¹, ²² their pioneering contributions to behavioral economics, including the study of cognitive biases like the anchoring effect, Daniel Kahneman was awarded the Nobel Memorial Prize in Economic Sciences in 2002.

##²⁰ Key Takeaways

• The Ankereffekt describes the tendency to rely heavily on the first piece of information encountered (the "anchor") when making judgments.
• ¹⁹ This cognitive bias can occur even when the anchor information is irrelevant or arbitrary.
• ¹⁸ It impacts various financial decisions, from valuation and negotiation to investment decisions and financial planning.
• ¹⁷ Awareness of the Ankereffekt is crucial for mitigating its influence and promoting more rational decision-making.

##¹⁶ Interpreting the Ankereffekt

The Ankereffekt suggests that once an initial reference point (the anchor) is established, individuals tend to interpret and adjust subsequent information in relation to that anchor. This adjustment is often insufficient, meaning the final decision remains biased towards the initial anchor. For¹⁵ instance, if a high price is initially quoted for an asset, subsequent lower offers may still seem reasonable, even if they are objectively high. Und¹⁴erstanding this bias is crucial for making sound investment decisions and for effective portfolio management, as it can lead investors to overvalue or undervalue assets based on arbitrary historical data or initial impressions.

Hypothetical Example

Consider an investor, Sarah, who is looking to buy shares in "Tech Innovations Inc." Her friend, Mark, casually mentions that he bought the stock a year ago when it was trading at $150 per share. This $150 figure, even though it's Mark's purchase price and not necessarily indicative of the company's current fundamentals, becomes an anchor for Sarah.

A week later, Sarah sees Tech Innovations Inc. trading at $100 per share. Despite the company's recent financial reports suggesting a fair value closer to $80, Sarah perceives $100 as a "good deal" because it's significantly lower than her anchor of $150. Her decision-making is influenced by this initial, somewhat irrelevant, piece of information. She might focus on the "discount" from $150 rather than conducting a thorough valuation based on current financial metrics, potentially leading her to overpay.

Practical Applications

The Ankereffekt has widespread practical applications across financial markets and everyday economic interactions:

• Pricing and Sales: Retailers often use higher initial "list prices" or "original prices" to make discounted prices appear more attractive, leveraging the anchoring effect.
• ¹³ Real Estate: In real estate, the initial listing price can significantly influence buyers' perceptions of a property's value, even if independent appraisals suggest a different market value.
• ¹¹, ¹² Negotiation: The first offer made in a negotiation often acts as a powerful anchor, influencing the range of all subsequent counteroffers and the final settlement price. Thi¹⁰s is why negotiators are often advised to make the first offer if they have done their research.
• Investing: Investors can fall victim to anchoring when they fixate on a stock's historical high, its purchase price, or previous analyst ratings, rather than re-evaluating the investment based on current market conditions and fundamentals. The⁹ U.S. Securities and Exchange Commission (SEC) highlights how behavioral biases like anchoring can impact investor decisions, leading them to hold onto declining investments.

##⁸ Limitations and Criticisms

While the Ankereffekt is a robust cognitive bias, its influence is not absolute and faces certain limitations and criticisms. The strength of the anchoring effect can vary depending on the informativeness of the anchor and the individual's knowledge or expertise in a given domain. Som⁷e research suggests that when anchors are clearly uninformative, their effect on valuation may be diminished.

Fu⁶rthermore, the Ankereffekt often interacts with other market psychology phenomena and cognitive biases, making it challenging to isolate its exact impact in complex, real-world scenarios. Cri⁵tics also point out that while anchoring biases are well-documented in experimental settings, their quantitative impact in dynamic financial markets, where participants are often sophisticated and have access to vast amounts of information, can be more nuanced. Nevertheless, recognizing the potential for this bias is a critical step in cultivating better decision-making.

Ankereffekt vs. Framing Effect

The Ankereffekt and the framing effect are both prominent cognitive biases within behavioral finance that influence decision-making, but they operate differently.

While the Ankereffekt is about the power of a starting number, the framing effect highlights how the presentation of information—even if factually identical—can alter preferences and choices. For example, presenting a discount as "50% off" (anchoring to the original price) rather than simply "priced at $50" (if the original was $100) incorporates both anchoring and framing elements.

FAQs

How does the Ankereffekt impact investment decisions?

The Ankereffekt can lead investors to cling to historical prices, such as the initial purchase price of a stock, or its past high, rather than evaluating the security based on current fundamentals and market conditions. This can result in holding onto losing investments too long or missing new opportunities. To coun²teract this, investors should regularly re-evaluate their positions based on up-to-date data.

Can the Ankereffekt be avoided?

While completely eliminating the Ankereffekt is challenging due to its unconscious nature, its influence can be mitigated. Strategies include seeking out diverse perspectives, conducting thorough research beyond initial data points, and establishing clear, objective investment decisions criteria before encountering specific information. Being aware of the bias is the first step toward managing it.

Is the Ankereffekt always about numbers?

While the Ankereffekt is often discussed in the context of numerical values (e.g., prices, percentages), the "anchor" can also be a conceptual reference point. For example, an initial impression or a descriptive label can also serve as an anchor, influencing subsequent judgments and perceptions.

How do professionals deal with the Ankereffekt?

Financial professionals, such as analysts and financial planning experts, try to counteract the Ankereffekt by employing systematic analysis, using multiple valuation models, and focusing on objective data rather than initial impressions or historical highs. They also emphasize setting clear risk tolerance levels and investment objectives to guide asset allocation and prevent biases from derailing strategies.¹