Ch. 4

Question 1

Anchoring and adjustment heuristic

Answer 1

• people make an estimate by using some starting value and then adjustng it to arrive at a final conclusion, however people’s final answers are not suficiently adjusted away from the initial anchor
• when people fail to make suficient adjustment away from an initial figure that they treat as an anchor.
• can be self-generated anchor
  eg. wheel spinning and pop estimate by Tversky/Kahneman

Question 2

What’s different about anchoring/adj. vs. representativeness, availability?

Answer 2

Frederick proposes that it dosn’t operate by replacing one type of judgement by a different judgment type, e.g. replacing probability judgment with a similarity judgment for representativeness)………

More gerneral than those, applies equally well to frequenvt judgments, values, magnitude, even causal attributions

Question 3

How robust is the anchoring effect? What is some evidence of its robustness?

Answer 3

• the effect has been observed in a variety of domains, including pricing, judgements, etc.
• although people use it, they rarely report being influenced by it
• people use anchors even when warned not to use them
• experts and non-experts both affected by anchors
• incentives are unsuccessful in reducing anchoring
• extreme or implausible anchors also affect judgments

Question 4

What are the underlying processes of anchoring effect?

Answer 4

seletive accessibility account - The comparative question task activates information in memory that is subsequently more accessible when making an absolute judgment.

— Various supporting findings; e.g. people with greater domain knowledge are less susceptible to the effects of irrelevant anchors (Wilson et al, 1996).
— But this account does not seem to have any need of the adjustment element.

Question 5

selective accessibility account

and pros/cons

Answer 5

the comparative question task activates info in memory that is then more accessible when making a judgment

support:

people attent to shared features more than unique ones

ppl with greater domain knowledge are less susceptible to irrelevant anchors

anchroing speeds recall of rando associated words

cons:

adjustment doesn’t seem ecessary

low external validity - in real life anchors are self-generated

Question 6

Epley & Gilovich “other” findings -

self-gnerated anchors

head nodding

reporting

Answer 6

more self-reports of adjustment when self-generated anchors rather than experimenter anchors

head nodding/shaking led to les/more adjustment with self-generated anchors…… but no effect with eperimenter generated ones

Question 7

Reasons why Epley (2004) think adjustment is insufficient?

Answer 7

1. People don’t know the right answer, so unlikely to adjust
2. adjustment requires attention, people may be lacking in cognitive resources
3. people who dislike effortful thinking adjust insufficiently from self-generated anchors

Question 8

Cognitive processes underlying external anchors vs. self-generated anchors

Answer 8

external - activates related material in the mind that is used to produce a response

self-gen - people generate a salient figure that they know to be wrong, which they then adjust away from

Question 9

Hindsight bias

Answer 9

• Uncertain outcomes often seem more likely after it is known that the outcome occurred
• creping determinism - that an outcome was inevitable or more forseeable than it rly was

—- Two classic studies: The Gurka study and the Nixon study

Question 10

creeping determinism

Answer 10

that an outcome was inevitable or more forseeable than it rly was

Question 11

Gurka study

what design did it use?

Answer 11

hypothetical design

People received decriptions of four unfamiliar historical events… 4 outcomes were described

some participants told that one outcome had occured

this knowledge altered ppls assessment of the relevance of rano scenario info

people seemed unaware that they were being influenced by this knowledge

Question 12

Nixon study

Answer 12

memory design

prior to trip to China, people asked to predict likelihood of various outcomes

2 weeks after the visits, the ppl were asked to give their original probabilities of what would happen

probabilities were inflated for what had occured and reduced for what hadn’t happend

Question 13

hypothetical design vs. memory design?

Answer 13

Gurk - hypothetical - judgments of those with end knowledge compared to those without

Nixon - memory - present self judges, compared to future self’s recall of prior judgment

no difference in hindsight bias between these 2 designs once accuraetely recalled answers were removed

Question 14

How robust is hindsight bias?

Answer 14

It still occurs when ppl are made aware of it….

however it is reduced when participants…

1. gave reasons for their diagnoses
2. were given a written record of their prior thoughts/ideas
3. were asked to engage in counterfactual thinking

Question 15

counterfactual thinking

Answer 15

thoughts that shine light on other possible outcomes

Question 16

What’s the impact of cultural and individual differences in hindsight bias?

Answer 16

Choi/Nisbett - East Asians showed more hindsight bias than westerners

Musch - personality factors related to self-presentation and suggestibility play big role in hypothetical design

Question 17

Alternative theories of hindsight bias

Answer 17

1. Outcome info is immediately assimilated into memory structures
2. restrospective reconstructino of judgment to lign up with extra info on outcome…. more misrecaling of the initial story in ways that endorsed the outcome
3. Pezzo’s model - initial surprise at an ourcome leads to sense-making activity…. if it makes sense it reduces surpise and increases hindsight…… if unsuccessful then surprise is maintained and can lead to reverse hindsight bias (the true outcome is seen as less predictable)

HINDSIGHT ARISES FROM SENSE-MAKING cognitions

Question 18

Pezzo’s sense-making model

pros

Answer 18

Pezzo’s model - initial surprise at an ourcome leads to sense-making activity…. if it makes sense it reduces surpise and increases hindsight…… if unsuccessful then surprise is maintained and can lead to reverse hindsight bias (the true outcome is seen as less predictable)

after the feedback, thouthgts inconsistent with the outcome were associated with lower hindsight

in scenarios that were difficult to make sense of no reverse hindsight was found……. suggests that the east of sense-making, rather than “suprisingness” is most important factor in hindsight

e.g. when doesnt make sense ppl have less hindsight

Question 19

Sense-making caveats

Answer 19

people are more confident about answers that they can retreive more quickly (availability?)

resrouce depletion - generating too many counterfactuals leads to more hindsight bias!

Question 20

How to avoid hindsight bias?

Answer 20

Slovic & Fischoff - people read 4 descriptions of studies…… told that they had either just occured or would occur…….. asked to give prob that results would be replicated

just occured got higher estimates….. however, when asked to consider reasons why EITHER outcome might happen, it reduced the hindsight bias (though not eliminating it)

thus, consider how things could have gone differently!

Question 21

Hindsight summary

Answer 21

• Tendency to retrospectively view events as more foreseeable or inevitable than they actually were.
• Can be reduced by reminding people of their earlier thoughts or asking them to engage in counterfactual thinking.
• 2 broad types of theory: (1) automatic updating of memory given outcomes, (2) retrospective updating at the time of judgment.
• There is evidence that this second type of theory may involve a process of sense-making.

Question 22

Anchoring summary

Answer 22

• Quantitative judgments are sometimes affected by the presence of an anchor.
• Externally-provided anchors heighten the accessibility of a small range of values in memory (selective accessibility account).
• Self-generated anchors are known to be wrong, so are associated with greater adjustment. But adjustment may still be insufficient for various reasons (true answer not known, competing demand for cognitive resources, lack of motivation).