As I am (slowly) making my way through Daniel Kahneman’s Thinking Fast and Slow, I find myself continually fascinated by the insights it contains into how the machines of our minds process information. Last night I was captured by the concept of the anchoring effect. Here’s how Kahneman explains it succinctly:
when people consider a particular value for an unknown quantity before estimating that quantity. What happens is one of the most reliable and robust results of experimental psychology: the estimates stay close to the number that people considered.
For example, consider the following pair of questions, asked in order — the first providing an anchoring value; the second asking for an estimated value — to two different groups of people:
As Kahneman recounts the nearly limitless variety of ways this occurs, borne out time and time again in study after study, the simple truth is this: encountering a numerical value prior to being asked to give a numerical estimate will have a powerful effect on shaping that estimate, regardless of whether the anchoring value is believed, or even if it was presented as reliable. Think of it as handing someone a telescope to look through and asking them to describe what they see. The effect of a high-value anchor is like handing the person the proper end of the telescope: everything looks bigger. The low-value anchor does the opposite, effectively spinning the telescope around and forcing the person to look through the wrong end: everything looks smaller.
What I found most interesting, though, was the effect of expertise in altering the equation. In one experiment, two groups of people — professional realtors and business school students — were shown a compilation of the relevant data of a house currently on the market and asked to estimate the value of the house. Included within this packet of data was the listed asking price for the house (the anchor), with half of the realtors and b-school students seeing a higher asking price, while the others saw a lower asking price. By comparing the estimated values all four groups assigned to the house, one intriguing lesson emerged:
the professionals were almost as susceptible to anchoring effects as business school students with no real-estate experience … The only difference between the two groups was that the students conceded that they were influenced by the anchor, while the professionals denied that influence.
Surprisingly, the ability of expertise to mute the anchoring effect was minimal. Not surprisingly, the experts were largely blind to the fact that they were as susceptible to the effects of psychological biases when dealing with uncertainty as were the inexperienced amateurs … and it is that hubris that intrigues me the most.
Whether it is at the level of quantum mechanics or in measuring the impact of high-velocity technological changes are having on us as a species, uncertainty is now the name of the game everywhere. In this rapidly-changing informational environment, what you already know is increasingly becoming a less valuable asset with each passing day; knowing what you need to learn next is now the key to unlocking the next great accomplishment. Of course, in order to make use of this shifting knowledge current, one must have the humility to recognize that it’s change in direction will leave even *your* special brand of expertise and brilliance behind. To not do so is to lose. As Liz Wiseman explained in her book Rookie Smarts:
Today we work in an environment where information is vast, fast, and fleeting. … Those trying to cling to the mastery model in today’s world will surely struggle … [as they] cling to their amassed body of knowledge and expertise, trying to hold their own in a culture that no longer values their brilliance. When their ephemeral knowledge becomes obsolete, they will be left faking a mastery they no longer possess. As the great physicist Stephen Hawking said, “The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.”
The pride of prior experience is no longer just an insufferable personality trait; it can quickly become a set of intellectual blinders, hiding the possibility of error to only the person suffering from it. Trust me when I say: just as the folks conducting the behavioral psychology experiment could see the professional realtor’s errors even though they could not, so too everyone else around you can see your error in clutching to the certainty of yesterday’s orthodoxy, even if you cannot.
In a world in which knowledge is becoming obsolete faster than it can be remembered, what is needed isn’t more knowledge or information — it is more humility.