Wednesday Night Substitute: Anchoring

The Verdict is still concentrating on the Virginia Tech shooting, so there's nothing on the trial in today's episode. So, instead of a write-up on it, I present a brief item on a psychological bias called "anchoring."

Essentially, anchoring bias means people having a tendency to take first impressions for granted, and relating subsequent impressions to the first. It can also mean using a metric as a substitute first impression, and relating all other data to that metric. An example of the latter, if not the former, in everyday life would be judging someone's professionalism on the clothes they're wearing, including how neat they are.

We all have a built-in anchoring bias, because it helps in sizing up the unprecedented (that first impression) and serves as a useful thought-economizer in an orderly world. Interestingly enough, despite the linking of anchoring-ridden thought to prejudice or stereotyping, the law itself is permeated with anchoring through stare decisis, the rule of precedent, which refines it and thus makes the law itself reliable.

This phenomenon even relates to the trial, in one way. Back in 1982, before deciding to throw the law in any which way they could at Conrad Black, the top executives, as well as the board members, at Hanna Mines Inc., or Hanna Inc., relied upon a Goldman, Sachs report on him, which was derived mainly from then-largely-unfavorable press clippings from the Canadian media. (Siklos, Shades of Black, p. 81.) Through this clipping service, Conrad Black's persona was "anchored" in Hanna's top management and board of directors as a mere paper shuffler, with a fondness for overly complex interlocking corporations, who seemed to have an inclination for enriching himself and his minions at the expense of minority shareholders. (Newman, The Establishment Man, p. 250.) This is the way in which Conrad Black was anchored right around the beginning of December 1981, in the minds of the people who ran Hanna. Unfortunately for Mr. Black, his testimony at a 1982 injuction hearing in the Delaware Court of Chancery (recounted in this entry) was consistent with the anchoring of him. His testimony, which Vice-Chancellor Manos described as "strained and unpersuasive" Shades of Black, p. 89,) served as an anchor unto itself, which Mr. Black reinforced twenty-two years later in the same court. In the 2004 injuction case where Hollinger International sought a block of Mr. Black's attempt to change the corporate bylaws of the company, Vice-Chancellor Strine wrote, "On more debatable points I find Black evasive and unreliable." (Ibid, p. 431.)

Had Conrad Black tried to break into the American business Establishment as of 1979, the anchoring used to peg him, given Goldman, Sachs' methodology, would have been a lot more favorable to him.

The above isn't an attempt to deploy the fiddle for the benefit of Mr. Black; it merely is intended to illustrate the fact that anchoring is like the sword that so many live, and sometimes die, by. If there's any lesson to be learned from the above experiences, it would be this one: these days, if you get out of town, then what "the town" used to get you out will follow you to your next theatre of operations.

----------

Douglas Bell, in the Toronto Life trial blog, quotes from the opener of Vice-Chancellor Strine's decision in this entry, and ends it with "Sound familiar?"