In an unbelievably clever experiment American judges were given a mock case to decide.
It was a personal injury case, and the only issue they had to resolve was the amount of damages.
The victim, a 31-years old school teacher, was hit by a truck owned by a large company. As a result he lost his right arm and incurred a lot of suffering leave alone medical expenses. This is what the control group of judges were told.
The experimental group of judges had all the same information, but they were additionally asked to rule on a Motion to Dismiss:
Allegedly the defendant claimed that amount-in-controversy requirement was not satisfied. Allegedly they claimed that the case was worth less then $ 75 000.
Crazy isn't it? So thought the judges.
But the ridiculous amount still had a profound impact on their assessment of the damages.
The judges who did not have to rule on the Motion to Dismiss awarded a mean of $1 249 000, compared to the mean of $882 000 awarded by those who had been affected by the quite random number of $ 75 000.
This is called Anchoring effect. People struggle to come up with numbers out of blue. That is why when given a reference point we subconsciously stick to it such an extent that sometimes it defies reason.
By the way, in another similar experiment a high anchor was used. One group of judges were only told about the injuries sustained whereas the other part was also informed that the plaintiff was willing to settle the case for $10 000 000.
As a result the anchored group of judges awarded more than twice as much as the not anchored group - $2 210 000 and $808 000 correspondingly.