Dangers of Extreme Anchoring

by Ken Brown
Springfield, MO
The Ozark Uncle is a retired accountant and accounting professor. Some feel that people with my background must be very smart and know a lot. Yet, many others are probably more accurate when they sense that the Ozark Uncle doesn't know very much at all--particularly as it relates to some topics being covered in this blog. But accountants are, for one, historians (i.e., they record the business events that have already happened), and second, they are information providers whereby they are supposed to inform stakeholders about an entity's finances.  That background relates to this blog.
To you grammarians including my lovely wife of 45 years, please don't let the Ozark Uncle's constant switching back and forth from third person to first person bother you. I do it on purpose but the Ozark Uncle can't tell you why I do it. [I'm now holding up an audience response card that says LOL].
Cartoon Descriptions--these cartoons were scanned from recent issues of Newsweek. Click on a cartoon to see it full sized and see the credit line of each one. Here is the context of each:

The "Don't Ask-Don't Tell" cartoon really hits home that all of our regulators (e.g., financial markets, banking, or natural resources [mines, oil, etc]), have been asleep at the wheel. The Ozark Uncle feels there is a kind of double twist captured by the artist to perhaps suggest that we as a people spend so much political energies on social issues like gays and abortion while a collapse of our economy, energy and banking systems could put us in a worse way than during the Great Depression.

The "Damn it Obama" cartoon picks up on our current paradox as to whether we want "Big Government" to step in or not. Even the Ozark Uncle (a fiscal conservative who wants someone with ideas to step up) is wringing his hands with indecision also.

 The corporacracy" cartoon was in response to the Supreme Court decision handed down that treats a corporation as a citizen like individuals. The Ozark Uncle has come to terms with this strange decision--some academic circles have suggested that the Supreme Court realizes the United States (with its special interests and lobbying influences) already is no longer a democracy of the people and it is simply acknowledging reality--we are run  by big business.

Executive Summary for this Post on Anchoring--Essentially the points are as follows:

1. Be cautious and critical when choosing information sources.
2. Be forever critical of one's own conclusions and beware of one's level of "anchoring"
3. A wise person will pass on to the next world with more questions than answers.
4. This post is pretty academic -- however, please try to plow through if your time permits.

Gasping for Breath in a Flood of Information
In the late 1980s, the Accounting Review, an academic journal that in my mind is barely readable, actually published a readable and enlightening interview with Nobel laureate and artificial intelligence expert, Herbert Simon of Carnegie Mellon University.

Herbert Simon

 The World Wide Web was in its infancy but one could see the massive storm clouds of digital information forming on the horizon. Dr. Simon's advice to information users like you was to "...be very selective in the information sources that one tries to follow. One should not feel that every information source should be absorbed" [paraphrased]. Dr. Simon's message to us accountants as information providers was to recognize that [direct quote] "...the scarce resource is not information but human attention." In other words--we accountants should not overload our target audience with all the wonderful data we possess.  The readers who have been trying to follow my rather lengthy blog postings prior to today have no doubt sensed the Ozark Uncle continues to have a problem with Too Much Information (TMI).
Anchoring: A Bias Toward Certain Pieces of Information
Here in 2010, we have cable and satellite television containing scores of channels, and high speed internet that use incredible search engines. For example, enter the words "ozark uncle" into Google from anywhere in the nation and a link to my web site appears. Thus, Dr. Simon's advice about information source selection is not easy--particularly if one has anchored into a set of biases whether they be religious, moral, cultural, or even racially discriminatory.

According to ScienceDaily.com, "...anchoring or focalism is a term used in psychology to describe the common human tendency to rely too heavily, or 'anchor,' on one trait or piece of information when making decisions." Furthermore the site's article indicates that, "...bias is distortion in the way we perceive reality." While, the internet will provide many more sites with a similar description, the Ozark Uncle deliberately chose the site with a "science" connection. Because of anchoring against the field of science, some readers and certainly the Texas School Book Commission (my current whipping post) may consider this source to be either unreliable or even false just because of the word science in its address. If so, just pick another site, duh!

(Now, true believers in the Holy Bible or the Koran or the Book of Mormon anchor and should anchor on their chosen source because they know it in their head and heart to be true--the definition of a belief." The Ozark Uncle admires and is actually envious of those who have reached and are maintaining that pinnacle of belief. With regard to the topic in this blog, however, remember that the New Testament Bible says to "beware of false prophets" (Matt. 7:15)  A more modern paraphrased version might be reworded to say "beware of false emails, news anchors, and talking heads with hidden agendas.")

Psychologists have a research interest into the degree to which we anchor ourselves and then how much contradictory information we must receive before we will alter our anchor. For example, a family to which I'm related have for years only bought gasoline at Conoco or Phillips stations because of a "bad gas" experience 20 years ago at a "no-brand" station. The family's members even today will drive miles out of the way to be sure they get only Conoco or Phillips gasoline. The problem with their anchor is that they are not allowing any new information about today's "no-brand" stations to either substantiate or debunk their original decision.

What are the Ozark Uncle's anchors you might ask? Well, he's thought of a couple and he intends to keep assessing myself. Here are two:

1. Formerly Anchored onto daily CNBC financial information In the year 2000, the Ozark Uncle retired from paid work. Now he still works but just doesn't get paid! Well, he had a little more money to play with then, and he began to watch the CNBC stock channel several hours a day. He felt so well informed and entered into investments with great confidence. Well, it took about 18 months of losing money before the Uncle realized that he was being misinformed by the analysts and guests on the network.  Included in the contradictory information that finally caused the Ozark Uncle to "pick up my anchor on CNBC" was an academic study which found one would have made money by going short on every stock that the CNBC guests suggested that one buy. So, I guess CNBC is my "bad gas" experience, and I hold an incredibly negative bias against that information source almost a decade later.
2. Currently Anchored on the Resilience of America's Young People There is an academic field called futurology. No doubt Herbert Simon applied his genius to the field somewhat. Futurists try to make educated guesses about the direction of the world twenty or thirty years from now. They probably wouldn't take issue with my saying that our world in 2110 will be as different from 2010 as 2010 is from 1910. And America's young people, while confronted with incredible economic, political, and cultural challenges, will adapt and will carry on. They will live, eat, drink, work and worship differently, but they will survive. Remember that The Only Constant is Change. Hericletus said that in 500 B.C. Is the Ozark Uncle just filled with knowledge? No, he just Googled that 30 seconds ago and found the author. God in the heavens, I love 2010 technology!

In the 1990s, the Ozark Uncle had his faculty office across the hall from a deeply religious man. It was in that period when the "Moral Majority" became mainstream, and the "liberal bias" and similar terms surfaced to help its followers stay anchored to the socially conservative boat.  My across-the-hall colleague testified long and often to me about abortion, gun rights, drugs, traditional male-female roles--well you get the idea. It so happened I had problems in my life then, and looking back, I remember him as being arrogant with his simplistic but ever-present judgmental answers to all my problems.

One day my colleague made a fatal slip; he said: "Don't you wish you had all the answers like me?"  Then I woke up--I started thinking about the guy and realized that he did not possess a single view that had not been fed to him by someone else. Although a very smart and highly educated man, he had allowed himself to be someone's pawn. He was tuned into a set of talking points that had been provided to him. If he hasn't changed--I have not seen him for years and don't really want to--then I feel sorry for him.

In closing, think about your anchors, challenge and double-check your information sources, and look for those hidden agendas which are so prevalent any more.