Lawnmowers, Peanut Slabs, and a decision making heuristic: An experiential activity for introducing management students to the anchoring effect

Abstract: Heuristics are pervasive mental shortcuts that simplify – but also often derail – human (including managerial) decision making. Psychological research has documented many heuristics seemingly built into the human mind, and management educators often teach these heuristics in undergraduate as well as executive-level courses, usually as part of a module on decision making. This experiential activity, which I developed for and use in my introductory, undergraduate management course, allows students to learn about one of the most common and consequential heuristics: the anchoring effect, which refers to the human tendency to be overly influenced (often to an irrational degree) by an initially-presented reference point or piece of information (the anchor) when making decisions (Furnham & Boo, 2011). I’ve run this activity more than 20 times at the time of writing, and each time have attained similar results that allow students to both understand the anchoring effect, and appreciate its powerful (though often difficult to spot!) impact on decision-making.