Journal Article
No. 2015-21 | July 15, 2015
Peter E. Earl
Anchoring in Economics: On Frey and Gallus on the Aggregation of Behavioural Anomalies
(Published in Economics, Psychology and Choice Theory)


This paper examines the research area identified by Frey and Gallus (Aggregate Effects of Behavioral Anomalies: A New Research Area, 2014) and the relationship between it and the choices that economists make. It supports the Frey and Gallus view that, as a consequence of individuals employing external inputs rather than relying upon their own judgemental capacities, the quality of decision-making may differ at the market and macro levels from what has been observed in laboratory experiments. It seeks to forestall potential moves by rational choice theorists to argue that such processes, imposed by competitive pressures, will swiftly eliminate anomalous behaviour. But it questions Frey and Gallus’s use of conventional rational choice theory as the reference point for judging the quality of real-world decisions. It argues that choice is an activity based on evolving sets of habits and rules, rather than based on given preference systems, and that Frey and Gallus’s failure to consider alternative reference points is itself a manifestation of anchoring.

JEL Classification:

A10, B00, D70


Cite As

Peter E. Earl (2015). Anchoring in Economics: On Frey and Gallus on the Aggregation of Behavioural Anomalies. Economics: The Open-Access, Open-Assessment E-Journal, 9 (2015-21): 1–25.

Comments and Questions

Romar Correa - comment on Anchoring in Economics
July 17, 2015 - 14:39
Congratulations, Peter Earl, on your grounded and wide-ranging essay. The opening paragraph of section 4 on page 112 brought back a memory I am sure you are aware of. In the late 1980s Paul David and W Brian Arthur published two minor classics on the subject of societies getting locked into inferior technological trajectories. The QWERTY keyboard turned out to be the canonical example. The proposition was that nothing in the elements existed to redirect economies towards a virtuous path. Both the papers and the authors cut through the mainstream/heterodox divide. In some circles, the work was heralded as ushering in a revolution in modelling strategy. I am not sure about the status of that research agenda.