A literature review of a cognitive heuristic: The anchoring effect

Abstract

The anchoring effect has gained popularity as a cognitive heuristic that aims to explain judgment errors people may make in their decision-making process. This article reviews and documents the literature in this area and finds that there is ample and extensive research available on this topic. By summarizing the results of previous research, it is found that the anchoring effect is a pervasive judgment bias when people are in an uncertain decision-making environment, taking different forms and having varying degrees of influence on decision outcomes. Therefore, this paper aims to summarize the existing findings and build on them for further exploration. To achieve this, the paper takes the type of anchor as an entry point and analyzes how externally provided anchors and decision makers' self-generated anchors respectively influence the decision-making process. Afterward, the article further explores the underlying logic of the anchoring effect through its two explanatory models. Since the anchoring effect has long been considered one of the most robust and common cognitive heuristics, this article then demonstrates the breadth of its application by documenting the various domains in which it has been shown to occur. Finally, this review article suggests several methods in which each of the two types of anchors can be weakened to some extent.