The anchoring effect in business intelligence supported decision-making

• Published in: Journal of decision systems Vol. 28; no. 2; pp. 67 - 81
• Main Authors: Ni, Feng, Arnott, David, Gao, Shijia
• Format: Journal Article
• Language: English
• Published: Abingdon Taylor & Francis 03.04.2019; Taylor & Francis Ltd
• Subjects: Anchoring; anchoring effect; Anchors; behavioral economics; Bias; Business intelligence; cognitive bias; Decision making; Information management; Intelligence (information)
• ISSN: 1246-0125; 2116-7052
• DOI: 10.1080/12460125.2019.1620573

This article reports on a study that is part of a larger project on how Business intelligence (BI) can effectively support a range of decisions made by different decision-makers through the lens of behavioural economics. This study examines one cognitive bias, the anchoring effect. A laboratory experiment was conducted where participants used a BI system to make a forecast. Two anchors with the same value were presented; a spurious anchor and a plausible anchor. We were interested if the use of a BI system would mitigate the negative consequences of the anchoring effect. Our results show BI system use mitigates the effect of a spurious anchor, but not a plausible anchor. That is, despite the significant expenditure on BI, decision-makers can still be subject to major biases and make less rational decisions. This study indicates that cognitive bias is an important topic for BI supported decision makingresearch and practice.