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COGNITIVE BIASES: APPLYING BEHAVIORAL ECONOMICS TO HEALTH CARE.

Kirk Sidey

    Iowa Medicine : Journal of the Iowa Medical Society
    |August 30, 2018
    PubMed
    Summary

    Cognitive biases significantly influence purchasing decisions. Even arbitrary numbers, like social security digits, can inflate willingness to pay for items such as cordless keyboards.

    Area of Science:

    • Behavioral Economics
    • Cognitive Psychology
    • Decision Science

    Background:

    • Decision-making is susceptible to cognitive biases.
    • Arbitrary numerical anchors can influence subjective valuations.

    Purpose of the Study:

    • To investigate the impact of numerical anchoring on willingness to pay.
    • To demonstrate how cognitive biases affect economic decisions.

    Main Methods:

    • Participants recorded the last two digits of their social security number.
    • Participants then stated their maximum willingness to pay for a cordless keyboard.

    Main Results:

    • Individuals with higher social security number endings were willing to pay 2-3 times more.
    • This indicates a strong influence of numerical anchoring on valuation.

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    Conclusions:

    • Arbitrary numerical information can significantly bias economic choices.
    • Understanding these biases is crucial for both consumers and healthcare professionals.