Symposium: Non-Delusional Anchoring

Now, Josh got upset with me the other day for not wanting to see a $12 comedy show because I had just seen a free show and was skeptical that this show would be “$12 better.” He accused me of anchoring. Basically, anchoring means that I am letting an arbitrary piece of information (in this case, that I happened to have seen a show for free) play an irrationally large role in my decision. As Josh said to me “it’s arbitrary that you saw UCB (the free show) first…if I didn’t tell you about that and just told you about this, you probably would react differently.”

Of course, Josh is right that I would have reacted differently, and there are definitely times when anchoring leads to very irrational behavior. But I maintain that it makes sense in this instance.

Anchoring is useful because it allows us to make up for informational asymmetry. When judging New York City comedy shows, I really have no way of knowing if I will like the show. Sure, I can go by reviews and buzz and recommendations, but a lot of those will be made by people with terrible taste (I mean, Mind of Mencia is a popular show). Plus, I could just end up going to a good show when the cast has an off night (or vice versa).

Unfortunately, you have to buy the ticket before you see the show. So we “anchor” our expectations of the price on other, similar things we have seen.

Think about the way we approach movies. I don’t really know how much I will like a movie until after I see it. So instead of basing price expectations on the perceived quality of the movie, you do it based on the price of other movies you’ve seen. If I go to the movies and a movie costs $30, I’m probably NOT going to see it, even if I will ultimately like it three times as much as a $10 movie.

The comedy show dilemma is, I think, even more extreme than movies, since I have no trailers or stars or known quantities on which to base my decision. And, really, there is no way around this problem (other than forming opinions about things arbitrarily and before you see them). So anchoring, in this instance, makes sense.

2 responses to this post.

  1. […] at NPI all have an interest in comedy (see John S. and Josh’s Anchoring Symposium for how this interest has led us to intense if obscure […]

    Reply

  2. […] we (John S and Josh) settled our squabbles on anchoring, we went to the highly recommended Upright Citizens Brigade Theater in New York nearly […]

    Reply

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