Anchoring Induced Biases in Consumer Price Negotiations

Kristensen, Henrik; Gärling, Tommy

doi:10.1023/a:1007280722313

Cited by 16 publications

(9 citation statements)

References 28 publications

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“…Self-serving Thompson and Loewenstein (1992), Babcock et al (1995Babcock et al ( , 1996, Gelfand et al (2002), Kriss et al (2011) 4 Anchoring Ritov (1996), Whyte and Sebenius (1997), Kristensen and Garling (2000), Wilson (2012) 5 Emotional bias Gladwin and Kumar (1987), Kramer et al (1993) 6 Overconfidence Neale and Bazerman (1985), Kramer et al (1993) 7 Incompatibility error Thompson and Hastie (1990) Framing The framing effect emerges as the starting point of the studies on cognitive biases in negotiation. According to it, individuals manifest varying perceptions and reactions based on how the problem is posed to them.…”

Section: Discussionmentioning

confidence: 99%

A literature review of cognitive biases in negotiation processes

Caputo

2013

International Journal of Conflict Management

109

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Purpose\ud – What is the discipline's current grasp of cognitive biases in negotiation processes? What lessons can be drawn from this body of literature? The purpose of this paper is to review and discuss the limited research on cognitive biases in the context of negotiations.\ud \ud Design/methodology/approach\ud – This article reviews research from judgment and decision-making, conflict management, psychology, and management literatures to systematize what we already know about cognitive biases in negotiations.\ud \ud Findings\ud – Decision-making studies have mainly identified 21 biases that may lead to lower quality decisions. Only five of those biases have been studied relating to negotiations: the anchoring, the overconfidence, the framing, the status quo and the self-serving bias. Moreover, negotiation literature has identified five additional biases that affect negotiation processes: the fixed-pie error, the incompatibility error, the intergroup bias, the relationship bias and the toughness bias. Biased behavior differs across cultures and emotional mood.\ud \ud Research limitations/implications\ud – Implications for future research include building comprehensive models of how negotiators can overcome cognitive biases, studying interconnections between different biases, and increasing complexity of the studies to provide practitioners with more practical advice.\ud \ud Originality/value\ud – The literature reviewed in this paper spans diverse disciplines and perspectives. This paper can be a starting point for researchers interested in understanding how cognitive biases affect negotiations. Moreover, it could be a starting point for future research on this field

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Section: Discussionmentioning

confidence: 99%

A literature review of cognitive biases in negotiation processes

Caputo

2013

International Journal of Conflict Management

109

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“…By inserting a fictional retail price as a high anchor and adding the ARP as the reduced price, the seller might artificially boost demand. Indeed, research shows that the reservation price varies congruently with an irrelevant anchor (Kristensen and Gärling 2000). So, if sellers provide such an irrelevant anchor, they may influence consumption.…”

Section: Framing and Anchoringmentioning

confidence: 99%

Price Intransparency, Consumer Decision Making and European Consumer Law

Boom

2011

J Consum Policy

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“…Many studies followed this two-stage procedure and demonstrated the robustness of the anchoring effect in many domains (e.g. Tversky and Kahneman 1974, Kristensen and Ga¨rling 2000, Wong and Kwong 2000. However, evidence of the anchoring effect is limited in internet shoppers' price estimates under the context of online auction.…”

Section: Introductionmentioning

confidence: 99%

“…Therefore, robust findings of anchoring bias can be observed in studies that follow the two-stage design (e.g. Tversky and Kahneman 1974, Mussweiler and Strack 1999, Kristensen and Ga¨rling 2000, Wong and Kwong 2000. However, there is no comparative judgement process to ensure that the anchor enters into the participants' short-term memory in one-stage design, and some other conditions are thus needed to induce the anchoring effect.…”

Section: Introductionmentioning

confidence: 99%

Exploring anchoring effect and the moderating role of repeated anchor in electronic commerce

Cheng

Lin

2008

Behaviour & Information Technology

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Most of the anchoring studies conduct the experiments following two-stage experimental design in which a comparative judgement is followed by an absolute estimate. However, this design is impractical in many situations, especially in online auction environments where consumers cannot be asked to make comparisons before they make estimates. This study suggests and validates an alternative experimental design where no comparison process is needed to induce anchoring bias. Moreover, we postulate that repeated occurrence of anchoring points affect the strength of the anchoring effect on participants' price estimates. Two experiments were conducted to investigate the anchoring effect in both two-stage and one-stage designs. The results showed that the anchoring effect was robust under two-stage design, and repeated occurrence of the anchor did not reinforce the anchoring effect. Moreover, people's price estimates are susceptible to the anchoring effect even when they were not asked to make a comparative judgement before they determine the final estimate. However, the anchoring effect can be further consolidated when the anchor appears three times rather than once. Experimental design introduced in study 2 provides a promising website design direction and we suggest that high anchors should be embedded in a web page repeatedly to influence the buyers' value estimates to produce a premium.

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Anchoring Induced Biases in Consumer Price Negotiations

Cited by 16 publications

References 28 publications

A literature review of cognitive biases in negotiation processes

A literature review of cognitive biases in negotiation processes

Price Intransparency, Consumer Decision Making and European Consumer Law

Exploring anchoring effect and the moderating role of repeated anchor in electronic commerce

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