Starting low but ending high

A reversal of the anchoring effect in auctions

Datos Bibliográficos

ID6205872
AutoresGillian Ku (0000-0001-7394-6700, London Business School), Adam D Galinsky (0000-0002-5150-6533, Northwestern University), J Keith Murnighan (Northwestern University)
Año2006
Volumen90
Número6
Páginas975-986
Fecha de publicación2006-01-01
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaJournal of Personality and Social Psychology (JOURNAL)
Identificadores de la revistaISSN: 0022-3514 • E-ISSN: 1939-1315
EditorialAmerican Psychological Association (APA) (PUBLISHER)
DOI10.1037/0022-3514.90.6.975
PMID16784346
OpenAlexW2059398616
IdiomaEN
Citas recibidas12
Referencias citadas49

Counter to the "start high, end high" effect of anchors in individual judgments and dyadic negotiations, 6 studies using a diverse set of methodologies document how and why, in the social setting of auctions, lower starting prices result in higher final prices. Three processes contribute to this effect. First, lower starting prices reduce barriers to entry, which increase traffic and generate higher final prices. Second, lower starting prices entice bidders to invest time and energy (creating sunk costs) and, consequently, escalate their commitments. Third, the traffic generated by lower starting prices can lead bidders to infer value in the item, thereby explaining previous findings that traffic begets more traffic. The authors show that barriers to entry that limit traffic (e.g., a misspelled brand name) lead to anchoring's normal assimilative effect rather than its reversal. By broadening the understanding of anchors to extended social interactions and open markets, the authors identify when and why starting prices anchor

Advertising · Anchoring · Business · Common value auction · Economics · Limit (mathematics) · Microeconomics · Negotiation · Set (abstract data type) · Sunk costs · Value (mathematics) · Auction Theory and Applications · Computer Science · Experimental Behavioral Economics Studies · Game Theory and Applications · Law · Psychology · Social Psychology