QUANTIFYING THE BIASED EXCHANGE OF MONEY AND TIME - How monetary and social factors influence decisions

Abstract: This study investigated whether anchored prices induced biased choices and time estimations for the pursuit of an equal discount and if different degrees of social distance influenced these biases. A new measurement for quantifying the relative degree of bias was also proposed. A sample group of 142 students were tested from a university in southern Sweden. In a repeated measure design, each participant made choices and time estimations to obtain three equal discounts (1,160 SEK) regarding three differently priced items. These choices and time estimations were framed in regard to oneself or another student, depending on the degree of social distance. Several steps were taken in order to balance extraneous variables across the two between - groups. The authors presented the results by displaying preference reversals regarding the participants’ choices. A mixed-ANOVA concluded a significant interaction between social distance and the anchored prices on the participants’ time estimations, p = .03, with significant main effect for the anchored prices, p = < .001. The results indicated a presence of a strong bias toward the anchored prices when the participants stated their choices and time estimations to obtain the equal discounts. The relative degree of bias decreased when the choices and time estimations regarded another student compared to oneself.