TOEFL Speaking Task 3

In behavioral economics, the concept of 'anchoring effect' refers to the tendency of individuals to rely too heavily on an initial piece of information (the 'anchor') when making decisions. Once an anchor is set, subsequent judgments are made by adjusting away from that anchor, and adjustments are often insufficient. This cognitive bias influences a wide range of decisions, including price evaluations, negotiations, and even everyday choices. The effect is robust even when the anchor is arbitrary or unrelated to the actual value.

Professor: Let me give you a real-world example from a study I conducted. I asked two groups of participants to estimate the price of a used car. Before they saw the car, I told Group A that the asking price was $10,000, and Group B that the asking price was $6,000. The car was identical, and the true market value was around $8,000. Interestingly, Group A’s average estimate was $9,200, while Group B’s average estimate was $6,800. Even though I told them the asking price was just a starting point and could be negotiated, both groups anchored heavily on that number. They adjusted their estimates, but not enough. This shows how an arbitrary initial figure can pull our judgments toward it, even when we know it's not necessarily accurate.