On the effect of anchoring on valuations when the anchor is transparently uninformative

Konstantinos Ioannidis (), Theo Offerman () and Randolph Sloof
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Konstantinos Ioannidis: CREED, University of Amsterdam and Tinbergen Institute
Theo Offerman: CREED, University of Amsterdam and Tinbergen Institute

Journal of the Economic Science Association, 2020, vol. 6, issue 1, No 7, 77-94

Abstract: Abstract We test whether anchoring affects people’s elicited valuations for a bottle of wine in individual decision-making and in markets. We anchor subjects by asking them if they are willing to sell a bottle of wine for a transparently uninformative random price. We elicit subjects’ Willingness-To-Accept for the bottle before and after the market. Subjects participate in a double auction market either in a small or a large trading group. The variance in subjects’ Willingness-To-Accept shrinks within trading groups. Our evidence supports the idea that markets have the potential to diminish anchoring effects. However, the market is not needed: our anchoring manipulation failed in a large sample. In a concise meta-analysis, we identify the circumstances under which anchoring effects of preferences can be expected.

Keywords: Anchoring; Replication; Market; Experiment; Meta-analysis (search for similar items in EconPapers)
JEL-codes: C91 D01 D91 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s40881-020-00094-1

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