Readers of my blog probably realize by now that one of my favorite topics is cognitive biases which “…refer to a range of systematic errors in human decision- making from the tendency to use mental shortcuts. “( “How Common Mental Shortcuts Can Cause Major Physician Errors” by Anupam B. Jena and Andrew R. Olenski, New York Times, February 20, 2020).
The just cited article discuses a bias I have not heard or thought about: left digit bias. After discussing recent research on biases in physician decision making, the authors reference a new published in The New England Journal of Medicine about “left-digit bias”. “This is the bias that explains why many goods are priced at $4.99 instead of $5.00, as consumer’s minds round down to the left -most digit of $4.00.” (Id.)
According to the study, it seems that when doctors are recommending treatment, they “…are overly sensitive to the left-most digit of a patient’s age…”. This appears especially so in cardiac surgery. Thus, with respect to two patients who may have had a heart attack in which one is 79 yrs. old with a birthday around the corner, and the other who just turned 80, the doctor is less likely to recommend by pass surgery for the latter patient because he is in his eighties than for the former patient who is in his seventies, although in reality their respective birthdays may be only a few weeks apart. (Id.)
The researchers conclude that with respect to age:
Our study confirms previous work that found doctors are overly responsive to patient age when diagnosing illness, and that showed how seemingly irrelevant factors‚ such as the difference of a few weeks of age, could govern physicians’ decisions about treatment, with potentially life-altering consequences for patients. (Id.)
Another example given concerns hemoglobin levels. “… [P]atients with a 9.9 grams per deciliter may be perceived as being substantially more anemic than patients with hemoglobin levels of 10.0 grams per deciliter (the difference of two values has no clinical significance.)” (Id.). Yet to the doctors, it does make a difference resulting in different treatment for the former than the latter.
The article concludes by noting that computer software programs are being used to “nudge” the doctors “in the right direction” and thus away from making the error prone mental shortcuts. (Id.)
As the article notes, merchandisers take advantage of this bias by offering products for “$4.99” rather than “$5.00.”. Although, these two prices are only one penny apart – in our minds, we seen a much larger difference. It is, indeed, psychological and an error in our judgment.
But, the article got me thinking that this left digit bias- is in all probability- quite prevalent in negotiations. When monetary demands and offers are being made, parties do tend to dwell on the left digit of the amount at issue. For example, there is a huge psychological difference between offering an amount of $9500 and $10, 000. While the actual difference is only $500, the mindset of the party sees a huge difference between the “9” and the “10”. I have seen this often with respect to any two numbers where one may be in the high teens (e.g. 18,000 or 19,000) and the other starts with a “2”- 20,000 or above. I suspect this is true with any two numbers be they in the hundreds of thousands or millions. That first digit or left digit in the monetary amount – for some psychological reason- makes a huge difference in a party’s decision to accept or reject the offer even though, in reality, the difference is only a few dollars!
So, while I have been seeing this bias in play for many years, I never knew it had a name. Now I do! And, it is a mental shortcut that we should all be aware of and try to work against in our own daily lives.
…. Just something to think about.
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