Anchoring Effect Experiment

Step 1: Setup

• Materials Needed: Flip charts, markers, scenario cards illustrating pricing or negotiation scenarios, "Rebel Unravel" cards highlighting the anchoring effect and related biases, and feedback forms.
• Room Preparation: Arrange seating in a circle or around tables for group discussions and activities.

Step 2: Briefing Participants

• Explain the concept of the anchoring effect and its relevance to pricing and negotiation strategies.
• Introduce the game's objective: to set a baseline (anchor) and observe how it influences subsequent decisions and pricing strategies.

Step 3: Scenario Introduction

• Present teams with hypothetical pricing or negotiation scenarios where the anchoring effect may come into play.

Step 4: Baseline Setting

• Each team sets a baseline price or offer for the given scenario, considering factors such as market value, perceived value, and competitor pricing.

Step 5: Group Discussion

• Facilitate a group discussion where teams share their rationale for the baseline price they set and how they believe it will influence subsequent decisions.

Step 6: Bias Identification

• Use the "Rebel Unravel" cards to highlight the anchoring effect and other related biases that may be at play in the scenario.

Step 7: Experimentation Phase

• Teams conduct experiments to test the influence of the baseline price on subsequent decisions or negotiations, varying the anchor and observing the outcomes.

Step 8: Data Collection

• Teams collect data on how different anchor prices impact customer perceptions, willingness to pay, and negotiation outcomes.

Step 9: Analysis

• Teams analyze the collected data to identify patterns and insights related to the anchoring effect and its influence on decision-making.

Step 10: Strategy Development

• Based on their analysis, teams develop strategies to leverage or counteract the anchoring effect in pricing and negotiation scenarios.

Step 11: Presentation Preparation

• Each team prepares a presentation outlining their findings and proposed strategies for leveraging or mitigating the anchoring effect.

Step 12: Strategy Presentation

• Teams present their findings and strategies to the group, explaining their rationale and approach.

Step 13: Peer Feedback

• After each presentation, teams provide feedback to one another, offering insights and suggestions for improvement.

Step 14: Expert Panel Review

• A panel of facilitators and invited experts evaluate each strategy based on its effectiveness, feasibility, and potential impact on pricing and negotiation outcomes.

Step 15: Winner Selection

• The winning team is selected based on the panel's evaluation and feedback from peers.

Step 16: Debriefing

• Facilitate a debrief session to discuss the strategies employed by each team and the implications of the anchoring effect on pricing and negotiation strategies.

Step 17: Reflection and Learning

• Encourage participants to reflect on the insights gained from the experiment and how they can apply them to their real-world pricing and negotiation practices.

Step 18: Feedback Collection

• Gather feedback from participants on the experiment's format, engagement level, and learning outcomes to inform future iterations.

Step 19: Follow-Up

• Follow up with participants to see how they have applied the strategies developed during the experiment in their pricing and negotiation initiatives.

Step 20: Celebrating Success

• Recognize and celebrate the winning team's achievement, as well as any notable contributions from other participants.

Step 21: Continued Practice

• Encourage ongoing experimentation and refinement of pricing and negotiation strategies to optimize outcomes and minimize the impact of biases like the anchoring effect.

The Anchoring Effect Experiment provides teams with a structured framework to understand and leverage the anchoring effect in pricing and negotiation scenarios, ultimately enhancing their ability to influence customer perceptions and behavior.