Anchoring effects and applications

Abstract

The anchoring effect has long been a subject that has attracted researchers from a diverse range of fields, including economics, finance, and psychology. This paper describes the background, definition, motivation, and some applications of the anchoring effect. Simultaneously, we pay more attention to the influence on economic research and consumption decisions. In application 1, we focus on the anchoring effect and marketing strategy by analyzing Evian water in Starbucks, the limited purchase of Campbell soup, and the descending price order on the menu. In application 2, we focus on the measurability of the anchoring by calculating the amount of donation under different situations and assessing the house’s value. In application 3, we focus on the link between the anchoring effect and suggestion by analyzing additional questions in two porridge shops. Our studies showed that anchoring affects all aspects of people’s lives. In addition, all our preliminary results illuminate the nature anchoring effect, which significantly influences the research of heuristics.