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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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File URL: http://www.sciencedirect.com/science/article/B6V84-4Y0T8YG-6/2/1af681a89b2f04054f557d24d836c574
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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. Oechssler, Jörg & Roider, Andreas & Schmitz, Patrick W., 2009. "Cognitive abilities and behavioral biases," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 147-152, October.
  2. Dohmen, Thomas J & Falk, Armin & Huffman, David & Sunde, Uwe, 2007. "Are Risk Aversion and Impatience Related to Cognitive Ability?," CEPR Discussion Papers 6398, C.E.P.R. Discussion Papers.
  3. 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.
  4. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
  5. 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. 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.
  2. Furnham, Adrian & Boo, Hua Chu, 2011. "A literature review of the anchoring effect," The Journal of Socio-Economics, Elsevier, vol. 40(1), pages 35-42, February.
  3. Hoppe, Eva I. & Kusterer, David J., 2011. "Behavioral biases and cognitive reflection," Economics Letters, Elsevier, vol. 110(2), pages 97-100, February.
  4. Marcella Veronesi & Anna Alberini & Joseph Cooper, 2011. "Implications of Bid Design and Willingness-To-Pay Distribution for Starting Point Bias in Double-Bounded Dichotomous Choice Contingent Valuation Surveys," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 49(2), pages 199-215, June.
  5. Drew Fudenberg & David K. Levine & Zacharias Maniadis, 2012. "On the Robustness of Anchoring Effects in WTP and WTA Experiments," American Economic Journal: Microeconomics, American Economic Association, vol. 4(2), pages 131-45, May.
  6. Holm, Håkan J. & Svensson, Emma, 2011. "Sticking to Prices? - Behavioral Differences in Price Setting," Working Papers 2011:16, Lund University, Department of Economics.
  7. 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.
  8. 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.

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