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  • Writer's picturePeter K F Cheung SBS

Anchoring Bias

  1. FADE IN.


  2. Act 1


  3. INT. STUDY - DAY


  4. Relaxing on a sofa, PETER is watching TV.


  5. PETER (V.O.): Oh, the CONVID-19 death toll in US has reached 100,000 within 3 months.


  6. Peter surfs the web with his phone.


  7. PETER (V.O.)(Cont'd): In the 2003 SARS pandemic, the world's death toll from Nov 2002 to July 2003 in 29 territories was 774.


  8. Pausing.


  9. PETER (V.O.)(Cont'd): During the first wave of SARs infection, mainland China had 339 deaths, Hong Kong, 299 deaths. US, Brazil, UK, and Italy had zero death.

  10. Pausing.


  11. PETER (V.O.)(Coint'd): In assessing the death toll of the coronavirus in late Jan 2020, I took the SARs statistics as my point of reference.


  12. Pausing.


  13. PETER (V.O.) (Cont'd): Given the similar experience, I estimated the death toll due to the coronavirus should be less than 700. How wrong I was!


  14. Pausing.


  15. PETER (V.O.)(Cont'd): How could I have so grossly underestimated the death toll of the coronavirus infection?


  16. Peter surfs the web.


  17. Act 2


  18. INT. STUDIES - CONTINUOUS


  19. Reading.


  20. PETER (V.O.) (Cont'd): When we judge on something, we often use an anchor or focal point as a starting point.


  21. Pausing.


  22. PETER (V.O.) (Cont'd): The anchoring bias occurs when we rely too much on pre-existing information, the first piece of available information, or an aspect of an event.


  23. Pausing.


  24. PETER (V.O.) (Cont'd): Once the anchor is set, any subsequent judgment is adjusted from the anchor, and there's the bias toward interpreting phenomenon etc around the anchor.


  25. Pausing.


  26. PETER (V.O.) (Cont'd): That explains why I stopped considering other possibilities after I've reached a primary analysis.


  27. Pausing.


  28. PETER (V.O.)(Cont'd): Such a common analytical error also explains why countries like US, Brazil, UK and Italy were very relaxed when they first heard about the coronavirus and delayed in taking containment and mitigation measures.


  29. Reflecting.


  30. PETER (V.O.)(Cont'd): I believe the anchoring bias also applies in criminal justice. Eg if a case is brought in a magistracy, a low sentencing tariff will be the focal point; similarly, and if the case is brought in a higher court, a higher sentencing tariff will be the focal point.


  31. Pausing.


  32. PETER (V.O.)(Cont'd): That's why there're different estimates/decisions to the same issue, although all are very wrong.


  33. Reflecting.


  34. PETER (V.O.) (Cont'd): The anchoring bias is pertinent in negotiations.


  35. INT. CONFERENCE ROOM, HONG KONG - DAY (2009)


  36. LADIES and GENTLEMEN sit on the opposite sides of a table. Peter is leading one side.


  37. PETER (V.O.): The European Free Trade Association (EFTA) is suggesting all the high demands.


  38. Pausing.


  39. PETER (V.O.) (Cont'd): It's unlikely that they would dramatically lower their demands from that level.


  40. Pausing.


  41. PETER (V.O.) (Cont'd): Let us keep on talking first, dealing the parts that Hong Kong can agree.


  42. INT. CONFERENCE ROOM, GENEVA - DAY (2010)


  43. Files on the table. LADIES and GENTLEMEN sit on the opposite sides of a table. Peter is leading one side.


  44. PETER (V.O.): The intellectual property chapter can make or break the bilateral free trade agreement.


  45. Pausing.


  46. PETER (V.O.) (Cont'd): My bottomline is that to have no agreement is better than to have a bad agreement.


  47. Pausing.


  48. PETER (V.O.) (Cont'd): Having appraised the core value, I feel like having stronger bargaining power.


  49. END FLASHBACK


  50. PETER (V.O.)(Cont'd): I always think that negotiation should be in good faith and a good agreement isn't a zero-sum game, but one that should advance mutual interests.


  51. Pausing.


  52. PETER (V.O.)(Cont'd): I did try, but the mindset of the other side wasn't like that.


  53. Peter sighs.


  54. Act 3


  55. INT. STUDY - CONTINUOUS


  56. PETER (V.O.)(Cont'd): I did manage to turnaround and there was the first free trade agreement between an economic area and Hong Kong.

  57. Peter surfs the web.


  58. PETER (V.O.)(Cont'd): It is said that anchoring effect are stronger for individuals with low cognitive ability.


  59. Smiling.


  60. PETER (V.O.)(Cont'd): It seems that my cognitive ability is on par with some presidents and prime ministers.


  61. Reflecting.


  62. PETER (V.O.)(Cont'd): If we set our anchor in anything in an unrealistic fashion, lesser options would diminish in value. Others will have their own anchors too, rendering compromise non-achievale or non-negotiable.


  63. Reflecting.


  64. PETER (V.O.)(Cont'd): Thus, if the pandemic death toll is estimated in terms of millions, 100,000 deaths in the initial phase of the pandemic shouldn't be alarming.


  65. Pausing.


  66. PETER (V.O.)(Cont'd): Basing on Hong Kong's SARS death toll, I thought Hong Kong's death toll should be in 3 digits. It is fortunate that Hong Kong has just 4 deaths.


  67. Pausing.


  68. PETER (V.O.)(Cont'd): I must remind myself of the anchoring bias or premature closure so that I can estimate better, negotiate better, and persuade better.


  69. Thinking.


  70. PETER (V.O.)(Cont'd): As people's minds are biased by first impressions, creating appropriate first impressions should facilitate engagement.


  71. FADE OUT.


  72. THE END


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