Replicating anchoring effects


Jason Collins


May 27, 2016

The classic Ariely, Loewenstein, and Prelec experiment (ungated pdf) ran as follows. Students are asked to think of the last two digits of their social security number - essentially a random number - as a dollar price. They are then asked whether they would be willing to buy certain consumer goods for that price or not. Finally, they are asked what is the most they would be willing to pay for each of these goods.

The result was that those with a higher starting price - that is, a higher last two digits on their social security number - were willing to pay more for the consumer goods. That random number “anchored” how much they were willing to pay.

Reading David Levine’s Is Behavioural Economics Doomed? (review to come soon), Levine mentions the following attempted replication:

On the Robustness of Anchoring Effects in WTP and WTA Experiments (ungated pdf)

Drew Fudenberg, David K. Levine, and Zacharias Maniadis

We reexamine the effects of the anchoring manipulation of Ariely, Loewenstein, and Prelec (2003) on the evaluation of common market goods and find very weak anchoring effects. We perform the same manipulation on the evaluation of binary lotteries, and find no anchoring effects at all. This suggests limits on the robustness of anchoring effects.

And from the body of the article:

Our first finding is that we are unable to replicate the results of ALP [Ariely, Loewenstein, and Prelec]: we find very weak anchoring effects both with WTP [willingness to pay] and with WTA [willingness to accept]. The Pearson correlation coefficients between the anchor and stated valuation are generally much lower than in ALP, and the magnitudes of the anchoring effects (as measured by the ratio of top to bottom quintile) are smaller. Repeating the ALP procedure for lotteries we do not find any anchoring effects at all.

Unlike ALP, we carried out laboratory rather than classroom experiments. This necessitated some minor changes—discussed below—from ALP’s procedures. It is conceivable that these changes are responsible for the differences in our findings; if so the robustness of their results is limited.

Our results do not confirm the very strong anchoring effects found in ALP. They are more in agreement with the results of Simonson and Drolet (2004) and Alevy, Landry, and List (2011). Simonson and Drolet (2004) used the same SSN-based anchor as ALP, and found no anchoring effects on WTA, and moderate anchoring effects on WTP for four common consumer goods. Alevy, Landry, and List (2011) performed a field experiment, eliciting the WTP for peanuts and collectible sports cards, and they found no anchoring effects. Bergman et al. (2010) also used the design of ALP for six common goods, and found anchoring effects, but of smaller magnitude than in ALP.

Tufano (2010) and Maniadis, Tufano, and List (2011) also failed to confirm the robustness of the magnitude of the anchoring effects of ALP, using hedonic experiences, rather than common goods. Tufano (2010) used the anchoring manipulation to increase the variance in subjects’ WTA for a bad-tasting liquid, but the manipulation had no effect. Notice that this liquid offers a simple (negative) hedonic experience, like the “annoying sounds” used in Experiment 2 of ALP. Maniadis, Tufano, and List (2011) replicated Experiment 2 of ALP and found weaker (and nonsignificant) anchoring effects. Overall our results suggest that anchoring is real—it is hard to reconcile otherwise the fact that in the WTA treatment with goods the ratios between highest and lowest quintile is always bigger than one—but that quantitatively the effect is small. Additionally our data supports the idea that anchoring goes away when bidding on objects with greater familiarity, such as lotteries.