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Anchoring and cognitive ability

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Author Info

  • Bergman, Oscar
  • Ellingsen, Tore
  • Johannesson, Magnus
  • Svensson, Cicek

Abstract

We find that the actual willingness to pay for various consumer goods can be manipulated by an uninformative anchor, replicating Ariely et al. (2003). We furthermore demonstrate that the anchoring effect decreases but does not vanish with higher cognitive ability.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 107 (2010)
Issue (Month): 1 (April)
Pages: 66-68

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Handle: RePEc:eee:ecolet:v:107:y:2010:i:1:p:66-68

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Web page: http://www.elsevier.com/locate/ecolet

Related research

Keywords: Anchoring Cognitive ability Experiments Willingness to pay;

References

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  1. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe, 2010. "Are risk aversion and impatience related to cognitive ability?," Munich Reprints in Economics 20063, University of Munich, Department of Economics.
  2. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
  3. Oechssler, Jörg & Roider, Andreas & Schmitz, Patrick W., 2008. "Cognitive Abilities and Behavioral Biases," IZA Discussion Papers 3481, Institute for the Study of Labor (IZA).
  4. Bohm, Peter & Linden, Johan & Sonnegard, Joakim, 1997. "Eliciting Reservation Prices: Becker-DeGroot-Marschak Mechanisms vs. Markets," Economic Journal, Royal Economic Society, vol. 107(443), pages 1079-89, July.
  5. Burnham, Terence C. & Cesarini, David & Johannesson, Magnus & Lichtenstein, Paul & Wallace, Björn, 2009. "Higher cognitive ability is associated with lower entries in a p-beauty contest," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 171-175, October.
  6. Dan Ariely & George Loewenstein & Drazen Prelec, 2003. ""Coherent Arbitrariness": Stable Demand Curves Without Stable Preferences," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 73-105, February.
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Citations

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Cited by:
  1. Eva I. Hoppe & David J. Kusterer, 2010. "Behavioral biases and cognitive reflection," Cologne Graduate School Working Paper Series 01-03, Cologne Graduate School in Management, Economics and Social Sciences.
  2. Chen, Chia-Ching & Chiu, I-Ming & Smith, John & Yamada, Tetsuji, 2012. "Too smart to be selfish? Measures of cognitive ability, social preferences, and consistency," MPRA Paper 41078, University Library of Munich, Germany.
  3. Marcella Veronesi & Anna Alberini & Joseph C. Cooper, 2005. "Detecting Starting Point Bias in Dichotomous-Choice Contingent Valuation Surveys," Working Papers 2005.119, Fondazione Eni Enrico Mattei.
  4. Sugden, Robert & Zheng, Jiwei & Zizzo, Daniel John, 2013. "Not all anchors are created equal," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 21-31.
  5. Gill, David & Prowse, Victoria, 2012. "Cognitive ability and learning to play equilibrium: A level-k analysis," MPRA Paper 38317, University Library of Munich, Germany, revised 23 Apr 2012.
  6. Ockenfels, Axel & Werner, Peter, 2014. "Scale manipulation in dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 138-142.
  7. Holm, Håkan J. & Svensson, Emma, 2011. "Equal Splits or Product Prices: An Experiment," Working Papers 2011:16, Lund University, Department of Economics, revised 22 Apr 2013.
  8. Sérgio Almeida De Sousa & Marcos De Almeida Rangel, 2014. "Do As I Do, Not As I Say: Incentivization And The Relationship Between Cognitive Ability And Riskaversion," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 126, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  9. Drew Fudenberg & David K Levine & Zacharias Maniadis, 2010. "On the Robustness of Anchoring Effects in WTP and WTA Experiments," Levine's Working Paper Archive 661465000000000312, David K. Levine.
  10. Furnham, Adrian & Boo, Hua Chu, 2011. "A literature review of the anchoring effect," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(1), pages 35-42, February.
  11. Meub, Lukas & Proeger, Till & Bizer, Kilian, 2013. "Anchoring: A valid explanation for biased forecasts when rational predictions are easily accessible and well incentivized?," Center for European, Governance and Economic Development Research Discussion Papers 166, University of Goettingen, Department of Economics.
  12. Drew Fudenberg & David K. Levine & Zacharias Maniadis, 2010. "Re-examining coherent arbitrariness for the evaluation of common goods and simple lotteries," Working Papers 034, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
  13. Meub, Lukas & Proeger, Till, 2014. "Are groups 'less behavioral'? The case of anchoring," Center for European, Governance and Economic Development Research Discussion Papers 188, University of Goettingen, Department of Economics.

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