Predictably Irrational by Dr. Dan Ariely Read Free Book Online Page B

new mother goose? In terms of goslings, I think you know that they would stick with the original mom. But what about humans? The next two phases of the experiment would enable us to answer these questions.
    In the second phase of the experiment, we took participants from the previous 10-cents and 90-cents groups and treated them to 30 seconds of a white, wooshing noise. “Hypothetically, would you listen to this sound again for 50 cents?” we asked them at the end. The respondents pressed a button on their computers to indicate yes or no.
    â€œOK, how much would you need to be paid for this?” we asked. Our participants typed in their lowest price; the computer did its thing; and, depending on their bids, some participants listened to the sound again and got paid and some did not. When we compared the prices, the 10-cents group offered much lower bids than the 90-cents group. This means that although both groups had been equally exposed to the suggested 50 cents, as their focal anchoring response (to “Hypothetically, would you listen to this sound again for 50 cents?”), the first anchor in this annoying sound category (which was 10 cents for some and 90 cents for others) predominated.
    Why? Perhaps the participants in the 10-cents group said something like the following to themselves: “Well, I listened previously to that annoying sound for a low amount. This sound is not much different. So if I said a low amount for the previous one, I guess I could bear this sound for about the same price.” Those who were in the 90-cents group used the same type of logic, but because their starting point was different, so was their ending point. These individuals told themselves, “Well, I listened previously to that annoying sound for a high amount. This sound is not much different. So since I said a high amount for the previous one, I guess I could bear this sound for about the same price.” Indeed, the effect of the first anchor held—indicating that anchors have an enduring effect for present prices as well as for future prices.
    There was one more step to this experiment. This time we had our participants listen to the oscillating sound that rose and fell in pitch for 30 seconds. We asked our 10-cents group, “Hypothetically, would you listen to this sound again for 90 cents?” Then we asked our 90-cents group, “Would you listen to this sound again for 10 cents?” Having flipped our anchors, we would now see which one, the local anchor or the first anchor, exerted the greatest influence.
    Once again, the participants typed in yes or no. Then we asked them for real bids: “How much would it take for you to listen to this again?” At this point, they had a history with three anchors: the first one they encountered in the experiment (either 10 cents or 90 cents), the second one (50 cents), and the most recent one (either 90 cents or 10 cents). Which one of these would have the largest influence on the price they demanded to listen to the sound?
    Again, it was as if our participants’ minds told them, “If I listened to the first sound for x cents, and listened to the second sound for x cents as well, then I can surely do this one for x cents, too!” And that’s what they did. Those who had first encountered the 10-cent anchor accepted low prices, even after 90 cents was suggested as the anchor. On the other hand, those who had first encountered the 90-cent anchor kept on demanding much higher prices, regardless of the anchors that followed.
    What did we show? That our first decisions resonate over a long sequence of decisions. First impressions are important, whether they involve remembering that our first DVD player cost much more than such players cost today (and realizing that, in comparison, the current prices are a steal) or remembering that gas was once a dollar a gallon, which makes every trip to the gas station a painful experience. In all these