Don McMinn

Anchoring (also called focalism) is a cognitive bias in which we become inordinately influenced by initial information (considered to be the “anchor”). Once we accept the anchor, all future judgments, decisions, negotiations, arguments, estimates, etc. are made in relation to the anchor. And we become reluctant to embrace information and facts that challenge the initial information. 

In short, we tend to rely too heavily on the first piece of information we’re given. It unduly influences our thinking.

For instance, anchoring is used by businesses and organizations to manipulate the perceived value of a product or service. The retail price of an item is listed (anchored) at $450, but it’s now on sale for $215. Naively, we may think the product is really worth $450 (though it may be worth only $50) so we believe the lower price must be a good value. To make matters worse, we may not even be interested in the item, but the “good deal” seems too good to pass up so we buy something we don’t need at an inflated price.

We can also become anchored to a plan of action, our first impression about an individual, a political persuasion, or the first comment we hear about a current event. 

Do not underestimate how gullible we humans are to this effect. 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. The audience members with higher two-digit numbers submitted bids that were between 60 percent and 120 percent higher than those with lower social security numbers. The number had become an anchor. When asked if they believed the number was informative of the value of the item, quite a few said yes. Even though everyone’s social security number is a random series of digits, those numbers had an effect on their decision-making. [My social security number ends with 00, so I probably would not have even bid.]

It’s very hard to totally avoid anchoring bias. Like all cognitive biases, it happens subconsciously, and it’s hard to identify, much less challenge subconscious thoughts. Here are some suggestions.

1. Be skeptical of first impressions. Challenge all thoughts and statements, but be particularly doubtful about first thoughts and statements. Develop counterarguments to primary thoughts.
2. When making a decision, always consider alternative options.
3. When making decisions as a group, designate someone to be the devil’s advocate—someone who will intentionally oppose and challenge the group’s ideas.

Mary and I love to travel and we especially enjoy traveling with friends.

For the past 15 years we’ve hosted an annual international trip limited to 50 people. We’ve explored Alaska, Western Europe, Russia, Israel, Peru, the Mediterranean, Baltic States, Greek Isles, British Isles, North Africa, and more.

Here’s a brochure about the upcoming October 5-18, 2027 trip to Italy, Greece,  Croatia, and Montenegro.    Adriatic-Trip-2027-Brochure-091926

Questions? Email me at djmcminn@msn.com

Don

For the last 14 months of its life, the check engine light in my old Subaru Forester (230,000 miles) was constantly on. I would fix one issue that triggered the alarm and then another would flare up. I became so weary of the issue that I didn’t even want to have it checked out. I just ignored the light and would have disconnected it had I known how to. 

Years ago (before Mary and I vowed to live debt-free) when our credit card bill would get out of hand, I avoided checking the balance because I knew it was high and out of control.

In both cases, I was exhibiting the ostrich effect (OE).

According to a persistent myth, ostriches bury their heads in the sand when they’re scared or feel threatened. They think they are safe if they can’t see the danger. (They don’t really do that.) 

The ostrich effect is a cognitive bias that causes people to avoid information that they perceive as potentially unpleasant. From a psychological standpoint, OE is the result of the conflict between what our rational mind knows to be important and what our emotional mind anticipates will be painful. Instead of helping, it drains us of time, energy, and resources and offers nothing of value in return. 

Here are some examples of the ostrich effect

• • • You may avoid getting a professional medical diagnosis because you’re afraid of hearing bad news (although, ironically, health information is crucial for health maintenance).
    • You regularly check your retirement fund when the market is going up but not when it’s going down (although, to manage your money wisely, you need consistent data).
    • Parents may hesitate to have a child who is having trouble in school tested.
    • A business executive may postpone delving into problems in her organization.

As is often the case with cognitive biases, the first step towards clarity is self-awareness. We must realize and admit that we’re falling prey to unhealthy thinking. I think the ostrich effect is one of the easiest biases to recognize: Just identify areas in your life in which you’re procrastinating or reluctant to get information because you think it might be bad news. 

The antidote to the ostrich effect is also simple and straightforward: Immediately and aggressively  pursue areas that you’re avoiding. Put them at the top of your to-do-list; pledge that you’ll not eat again until you address the issues.  

The ostrich effect offers no value—there’s no upside—but overcoming it is very beneficial. As the Bible says, “The truth will set you free,” even if the truth is unpalatable.

At the end of the day, we typically begin casual conversations by asking “What did you do today?” Another good question is, “What did you learn today?” 

Everyone has a quick answer to the first question, even if it’s just “not much.” But most of us would stumble over the second question because we seldom consider learning to be a daily function. We’d be confused by the question and hard-pressed to answer. 

But if asked regularly, the question can serve as a reminder, and a prompt, that all through life and in all settings,  we can, and should, continually learn.

We have much to learn.

“We all differ in what we know, but in infinite ignorance, we are all equal.” Karl Popper

Few things will stifle learning more than intellectual arrogance accompanied by a false sense of knowing-it-all. Sadly, some people live as if they have maxed out their learning—there’s little more to learn, do, or become. Instead, we should view ourselves as unfinished—a work in progress. We all live in what Popper calls the realm of “infinite ignorance.” A healthy, proper approach to learning is predicated upon a deep humility based on the fact that we know and understand so little.

Imagine a grain of rice inside a five-gallon bucket. The grain of rice represents what you currently know; the space in the bucket represents what you could learn.

Develop an enquiring mind; be curious.

But admitting that we have a lot to learn is not enough, we must have a curious, inquiring mind. 

Albert Einstein once said, “I have no special talent. I am only passionately curious.” I think he was being excessively modest in the first phrase, but notice his emphasis on curiosity in the second. An engaged, curious mind is supple, eager, and insatiable.

Learn from other people.

Secondhand knowledge allows us to benefit from what others have learned. What may have taken someone years to learn (and often through formidable adversity), we can learn quickly and painlessly. One way to do this is to read other people’s thoughts—read 15 minutes a day and think about what you read. Another way to learn from others is through observation and intentional conversation. Lean by listening to and observing others. We can learn from anyone, regardless of their background, education, age, or occupation. 

Learn from your own experiences.

Firsthand knowledge comes from personal experiences. Every day, life offers us the opportunity for continuing education. But we’ll only learn if we’re attentive and wanting to learn. The next time you go shopping or eat at a restaurant, or mow your lawn, anticipate that you’re going to learn something and you will. 

Years ago I developed a simple equation to express how we can learn from experiences: the 10/60/30 concept. This notion suggests that in all of life’s experiences you should devote a certain percentage of your time to three elements: anticipate (perhaps 10%), experience (perhaps 60%), and reflect (perhaps 30%). The percentages can be adjusted for different activities.

For instance:

• • When reading a book—spend a few minutes anticipating what you hope to learn from the book, read the book, and then reflect on what you have learned. This ration might be 5/60/35.
  • Prior to a business appointment—think about what you hope to accomplish in the meeting, have the meeting, and then reflect on what transpired and the next steps of action. These percentages might be 15/65/20.
  • Prior to a vacation—research where you’re going, bon voyage, and at the end of each day codify your thoughts in a journal.  These percentages might be 10/70/20.

Tonight, during dinner, ask everyone to share what they learned today. It will prompt interesting conversation.

Let me ask you, “What did you learn today?” Try to have a new answer to that question every day.