Anchors Away

Cognitive biases (i.e., widespread deviations from logical thinking) are always fascinating to me.  You can imagine my surprise when I stumbled upon one I was previously unaware of in my three-year-old son. 

Before parenthood, I assumed that you could tell your child anything and expect even your wildest assertions to be met with unbridled credulity.  After all, it's not as though the little tot has a built-in fact checker in his oversized melon.  If you want him to believe that Phyllis Diller spends her evenings hunting for the souls of disobedient children, just tell him so.  He's not going to launch an investigation.

To my surprise (and disappointment) I found that there are strict limits to my powers to mold young minds at will.  About six months ago I noticed my son disagreeing with me adamantly when I would try to pull the wool over his eyes.  I would, for instance, change the lyrics of a song I had taught him, or tell him that a green traffic light indicates that one needs to stop.  He would explain loudly that I was singing the song wrong, and that one stops at red lights, not green.  This seemed odd to me.  After all, I was the one who gave him the information on these things in the first place, and at the time he had accepted my wisdom unquestioningly.  I was his source of knowledge.  And now, as his source of knowledge, I was changing his reality (or futilly attempting to do so).  Why the resistance?

Then it hit me.  My son will believe whatever I tell him on a given topic as long as I am providing him his first bit of information on that topic.  Once he has absorbed that initial fact, it becomes his reality, and I am no longer in control of that part of his knowledge.  In other words, if he gets two pieces of information, each with the same probability of being true (in that they come from the same source) he will believe the first piece of information he happened to hear.

After a little digging I found that this is not a phenomenon unique to my son.  It's a cognitive bias known as "Anchoring," and it affects us all to a greater or lesser extent.  When we have no information on a topic, we are very malleable in our opinions on it.  But once we get some information on the topic, our mind uses that information as an anchoring point, and it is difficult to accept contrary information as true.  Unfortunately, this is still the case even if the contrary information is of higher quality than the initial information  (this helps explain, to some extent, why people tend to hold religious and political beliefs similar to those of their parents).

The application to business is obvious.  Firms that have a faulty vision of reality are at serious risk of financial trouble, and an unfortunate (but widespread) human weakness is to base your vision of reality on early information rather than good information.  Knowing that we have this weakness, we would do well to make a conscious effort to overcome it.  If you find it difficult to change your mind after forming an initial opinion (especially with regards to your firm), do a reality check.  There's a good chance you're in error even if you're not in doubt.

Comments

[Andra Mount]

Very interesting blog. Seemed appropriate to send you a link to a USA Today article talking about anchoring being a problem with doctors when diagnosing an illness:
http://www.usatoday.com/news/health/2007-09-05-diagnosis-technology_N.htm?csp=34

Here is a quote from the article:

According to a 2003 Journal of the American Medical Association review of autopsy studies, doctors misdiagnose 8% to 24% of the time. Cognitive errors, such as latching onto a diagnosis that seems the most likely without considering other possibilities — which experts call "anchoring" — are among many root causes ...

[Abel Winn]

Thanks for sending that along, Andra. I'll read it at the first opportunity. I ran into medical anchoring at the beginning of the year when my dad came down with a sudden illness. (He's doing well now, though, incidentally.)

[drug rehabilitation treatment]

Give please. The two symbols of the Republican Party: an elephant, and a big fat white guy who is threatened by change.
I am from Marshall and learning to speak English, tell me right I wrote the following sentence: "Offering inpatient outpatient treatment for alcohol and drug addiction.Drug treatment and alcohol rehab programs are the road to freedom from drug treatment is an essential step to overcoming drug and alcohol addiction and."

8) Thanks in advance. Dory.