The movie Focus and exploring anchoring bias. Anchoring bias is one of our big decision-making cognitive biases. The “Big 5” decision cognitive biases are confirmation bias, anchoring bias, availability bias, representativeness bias, and groupthink. Anchoring is typically leveraged by salespeople and foundational to a confidence scheme. The Will Smith and Margot Robbie movie provides a fun and high-impact example of anchoring bias. SPOILER ALERT: The next couple of paragraphs reveal a movie scene.
About the author: Jeff Hulett is a behavioral economist and a decision scientist. He is an executive with the Definitive Companies. Jeff teaches personal finance and the decision sciences at James Madison University. Jeff is an author and his latest book is Making Choice, Making Money: Your Guide to Making Confident Financial Decisions. His experience includes senior leadership roles in banking and bank risk consulting. Jeff holds advanced degrees in finance, mathematics, and economics. Jeff and his family live in the Washington D.C. area
The exemplary scene is when the Smith character makes a seemingly sure-to-lose bet at a football game with a high-flying tycoon. This scene is super entertaining and the "good guys" win the bet. This occurs by a seemingly outrageous stroke of luck, as the Smith character won the bet when both the tycoon and the Robbie character pick the same player's number 55.
Why the bet is sure-to-lose:
First -- let's explore the underlying probability of the tycoon and the Robbie character independently picking the same player:
If each football team has 80 players and
each football team has a similar number set from which to choose,
then the probability baseline of 2 independent and random number pickers selecting the same number is VERY LOW. [ (1/80)^2 = .02% ]
Insider information makes the bet a little less sure-to-lose:
Earlier in the movie, the Robbie character was revealed as a bet insider. Because she is an insider, it is not surprising that she picked “55.” So, for the Smith character, this raises the baseline probability to 1/80 or just over a 1% chance that the tycoon would pick “55”. While an improvement over .02%, it is still a horrible bet. So how did he win the bet?
Interpreting the graphic: Each one of the graphic's bars represents a player, grouped into the two football teams. The anchoring effect reduces the number of alternatives (the denominator) to improve the chances the tycoon will pick 55. Going from left to right, as the number of alternatives decreases, the probability of Smith winning the bet increases.
Anchoring bias makes the bet more of a sure thing:
This scene is later explained as a prototypical example of anchoring bias and using psychology to greatly improve a random probability baseline. They show how the tycoon was anchored to the number "55" by a series of subtle but effective nudges as the tycoon approached the football stadium and his suite. A series of well-placed psychological anchors craftily reduced the tycoon's set of player number alternatives. By the way, the anchoring nudges described in the movie are comparable to the anchoring impact of a car salesperson's suggested test drive. Salespeople are good at improving their sales odds. Sometimes, this is accomplished by craftily reducing the perceived number of competitive alternatives. By test-driving a car, the salesperson hopes to anchor the prospect in the test-driven model. This reduces the competitive alternative set and increases the chance of a sale.
We can all imagine how this “made for Hollywood” bet could have gone wrong for the Smith character. But it is still a nice example of the impact of psychological anchors in our decision-making. To dig deeper, including more context on decision-making, cognitive biases, and helpful decision solutions -- please see the article: