Behaviour Change

PROPAGANDA FOR CHANGE is a project created by the students of Behaviour Change (ps359) and Professor Thomas Hills @thomhills at the Psychology Department of the University of Warwick. This work was supported by funding from Warwick's Institute for Advanced Teaching and Learning.

Tuesday, February 2, 2016

Is this deal wheel-y good, or are you just a dipstick?

Now I don't want to dash any lingering excitement, but if you've recently bought a car this may grind your gears/drive you crazy/[insert car pun here]. Ok that's enough, car puns are exhausting!

If you've ever driven past a car dealership forecourt you will often notice the astronomical prices of the cars present there. Sure, Dodgy Dave from down the road may be selling his 1979 Robin Reliant, but if you're searching for a place to buy a car, these dealerships are often the most reliable source. So just why are the prices on the cars so incredibly high, often a lot higher than the car's actual value?

Well, as they say, first impressions count. This tactic plays upon the the anchoring-and-adjustment heuristic, suggested by Tversky and Kahneman (1974). In their classic experiment, participants were asked to estimate the percentage of African countries in the United Nations. The participants were asked to spin a wheel-of-fortune, and were then asked whether the percentage was above or below the reference value provided by the wheel. They were then asked to provide an absolute estimation of the value. The initial reference value significantly influenced the later estimate: groups that received 10 and 65 as reference values, later gave median responses of 25 and 45 respectively.

This anchoring effect occurs when the subject is making a judgement under uncertainty. Tversky and Kahneman (1974) suggest that subjects fail to adequately adjust their own judgements down/up from the initial presented value, leading to a distorted valuation. Further research has suggested that greater ambiguity, and a lack of familiarity with the problem can lead to greater anchoring effects (Van Exel et al., 2006). So, unless you're a car expert, you're often more susceptible to this clever little trick!

You may think you're getting the wheel deal, but if a car which is actually valued at £1000 is being sold for £2000, the car dealership is likely to make a large profit regardless of your haggling ability!  This is because the available valuation of the car remains in your head, with the sticking power of Donald Trump's toupee (seriously, how does that thing stay on?), skewing your own valuation of the car.

Mussweiler et al. (2000) applied this to a real world car valuation example. As shown in Table 1, the higher anchor (M = 3,347 Marks) lead to significantly higher valuation estimates than the low anchor (M = 2,652 Marks), F(1,56) = 4.25, p < .04.

So next time you're out shopping for a new motor, try and keep a (hub)cap on your spending: check the value before you go to avoid speeding into a deal that will surely end in a breakdown!


Mussweiler, T., Strack, F., & Pfeiffer, T. (2000). Overcoming the inevitable anchoring effect: Considering the opposite compensates for selective accessibility. Personality and Social Psychology Bulletin, 26, 1142-1150.

Tversky, A., & Kahneman, D. (1974). Judgement under uncertainty: Heuristics and biases. Science, 184, 1124-1131.

Van Exel, N., Brouwer, W., van den Berg, B., Koopmanschap, M. (2006). With a little help from an anchor: Discussion and evidence of anchoring effects in contingent valuation. Journal of Socio-Economics, 35, 836-853.

1 comment:

  1. This really revved my engine, i feel like you could go the distance


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