The anchoring effect in business intelligence supported decision-making

Abstract

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.

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