Thursday, May 5, 2016

Bias #3: Anchoring & Response Biases


THE INTRODUCTION


Anchoring or focalism is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments. Once an anchor is set, other judgments are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor. For example, the initial price offered for a used car sets the standard for the rest of the negotiations, so that prices lower than the initial price seem more reasonable even if they are still higher than what the car is really worth.

Anchoring and adjustment is a psychological heuristic that influences the way people intuitively assess probabilities. According to this heuristic, people start with an implicitly suggested reference point (the "anchor") and make adjustments to it to reach their estimate. A person begins with a first approximation (anchor) and then makes incremental adjustments based on additional information. These adjustments are usually insufficient, giving the initial anchor a great deal of influence over future assessments.

Wikipedia:
Response bias is a general term for a wide range of cognitive biases that influence the responses of participants away from an accurate or truthful response. These biases are most prevalent in the types of studies and research that involve participant self-report, such as structured interviews or surveys. Response biases can have a large impact on the validity of questionnaires or surveys.

Response bias can be induced or caused by a number of factors, all relating to the idea that human subjects do not respond passively to stimuli, but rather actively integrate multiple sources of information to generate a response in a given situation. Because of this, almost any aspect of an experimental condition may potentially bias a respondent. Examples include the phrasing of questions in surveys, the demeanor of the researcher, the way the experiment is conducted, or the desires of the participant to be a good experimental subject and to provide socially desirable responses may affect the response in some way. All of these "artifacts" of survey and self-report research may have the potential to damage the validity of a measure or study. Compounding this issue is that surveys affected by response bias still often have high reliability, which can lure researchers into a false sense of security about the conclusions they draw.

Because of response bias, it is possible that some study results are due to a systematic response bias rather than the hypothesized effect, which can have a profound effect on psychological and other types of research using questionnaires or surveys. It is therefore important for researchers to be aware of response bias and the effect it can have on their research so that they can attempt to prevent it from impacting their findings in a negative manner.

THE EVIDENCE


The focusing effect (or focusing illusion) is a cognitive bias that occurs when people place too much importance on one aspect of an event, causing an error in accurately predicting the utility of a future outcome. A rise in income has only a small and transient effect on happiness and well-being, but people consistently overestimate this effect. Kahneman et al. proposed that this is a result of a focusing illusion, with people focusing on conventional measures of achievement rather than on everyday routine.

As an example, in a study by Dan Ariely, an audience is first asked to write the last two digits of their social security number and consider whether they would pay this number of dollars for items whose value they did not know, such as wine, chocolate and computer equipment. They were then asked to bid for these items, with the result that the audience members with higher two-digit numbers would submit bids that were between 60 percent and 120 percent higher than those with the lower social security numbers, which had become their anchor.

In negotiation, anchoring refers to the concept of setting a boundary that outlines the basic constraints for a negotiation; subsequently, the anchoring effect is the phenomenon in which we set our estimation for the true value of the item at hand. In addition to the initial research conducted by Tversky and Kahneman, multiple other studies have shown that anchoring can greatly influence the estimated value of an object.

Anchoring can have more subtle effects on negotiations as well. Janiszewski and Uy investigated the effects of precision of an anchor. Participants read an initial price for a beach house, then gave the price they thought it was worth. They received either a general, seemingly nonspecific anchor (e.g. $800,000) or a more precise and specific anchor (e.g. $799,800). Participants with a general anchor adjusted their estimate more than those given a precise anchor ($751,867 vs $784,671). The authors propose that this effect comes from difference in scale; in other words, the anchor affects not only the starting value, but also the starting scale. When given a general anchor of $20, people will adjust in large increments ($19, $21, etc.), but when given a more specific anchor like $19.85, people will adjust on a lower scale ($19.75, $19.95, etc.). Thus, a more specific initial price will tend to result in a final price closer to the initial one.

Types of Response Bias

Acquiescence bias is a category of response bias in which respondents to a survey have a tendency to agree with all the questions or to indicate a positive connotation. Acquiescence is sometimes referred to as "yea-saying" and is the tendency of a respondent to agree with a statement when in doubt. This particularly is in the case of surveys or questionnaires that employ truisms, such as: "It is better to give than to receive" or "Never a lender nor a borrower be".


Demand characteristics refer a type of response bias where participants alter their response or behavior simply because they are part of an experiment. This arises because participants are actively engaged in the experiment, and may try and figure out the purpose, or adopt certain behaviors they believe belong in an experimental setting. Martin Orne was one of the first to identify this type of bias, and has developed several theories hoping to address their cause. His research points to the idea that participants enter a certain type of social interaction when engaging in an experiment, and this special social interaction drives participants to consciously and unconsciously alter their behavior.


Extreme responding is a form of response bias that drives respondents to only select the most extreme options or answers available. One example ties the development of this type of bias in respondents to their cultural identity. This explanation states that some cultures are more likely to respond in an extreme manner as compared to others. For example, research has found that those from the Middle East and Latin America are more prone to be affected by extremity response, whereas those from East Asia and Western Europe are less likely to be affected by extremity response. A second explanation for this type of response bias relates to the education level of the participants. Research has indicated that those with lower intelligence, measured by an analysis of IQ and school achievement, are more likely to be affected by extremity response. Finally, one other way that this bias can be introduced is through the wording of questions in the survey or questionnaire. Certain topics or the wording of a question may drive participants to respond in an extreme manner, especially if it relates to the motivations or beliefs of the participant.


Social desirability bias is a type of response bias that influences a participant to deny undesirable traits, and ascribe to traits that are socially desirable. In essence, it is a bias that drives an individual to answer in a way that makes them look more favorable to the experimenter. This bias can take many forms. Some individuals may over-report good behavior, while others may under-report bad, or undesirable behavior. A critical aspect of how this bias can come to affect the responses of participants relates to the norms of the society in which the research is taking place.

Overall, this bias can be very problematic for self-report researchers, especially if the topic they are looking at is controversial. The distortions created by respondents answering in a socially desirable manner can have profound effects on the validity of self-report research without being able to control for or deal with this bias, researchers would be unable to determine if the effects they are measuring are due to individual differences, or from a desire to conform to the societal norms present in the population they are studying.


THE VERDICT

Early research found that experts (those with high knowledge, experience, or expertise in some field) were more resistant to the anchoring effect. Since then, however, numerous studies have demonstrated that while experience can sometimes reduce the effect, even experts are susceptible to anchoring. In a study concerning the effects of anchoring on judicial decisions, researchers found that even experienced legal professionals were affected by anchoring. This remained true even when the anchors provided were arbitrary and unrelated to the case in question.

In the same study that criticized anchoring-and-adjusting, the authors proposed an alternate explanation regarding selective accessibility, which is derived from a theory called "confirmatory hypothesis testing". In short, selective accessibility proposes that when given an anchor, a judge (i.e. a person making some judgment) will evaluate the hypothesis that the anchor is a suitable answer. Assuming it is not, the judge moves on to another guess, but not before accessing all the relevant attributes of the anchor itself. Then, when evaluating the new answer, the judge looks for ways in which it is similar to the anchor, resulting in the anchoring effect. Various studies have found empirical support for this hypothesis. This explanation assumes that the judge considers the anchor to be a plausible value so that it is not immediately rejected, which would preclude considering its relevant attributes.

More recently, a third explanation of anchoring has been proposed concerning attitude change. According to this theory, providing an anchor changes someone's attitudes to be more favorable to the particular attributes of that anchor, biasing future answers to have similar characteristics as the anchor. Leading proponents of this theory consider it to be an alternate explanation in line with prior research on anchoring-and-adjusting and selective accessibility.

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