Sunday, March 02, 2008

Comparisons and Anchors

It's been a while since I posted, but I'm going to try and post daily from this point on - we'll see.

I've been listening to the book Predictably Irrational: The Hidden Forces that Shape Our Decisions on my iPhone that I got from my audible subscription. In this book, the author describes how we compare things and how anchors affect us. In short, an anchor is the first thing that we related to a category. I'll give an example. If we see a bicycle advertised for $20, then $20 becomes the anchor price for all bicycles. If we later see a bicycle for $40 we believe that it is either better in some way or overpriced, but we always go back and compare it to the first price we saw. He performed studies where anchors were used to manipulate the amount people would pay for an item. For instance, if people were asked if $10 were a reasonable price for an item, their maximum price was much higher than those people who were asked if $0.10 were a reasonable price. The initial anchor greatly affects how we view future spending on an item.

I believe that an iterative approach to software development should be described in these terms. With the first iteration we give the user an anchor. He then can make decisions about that program with the initial program in mind. His requests should be more rational because he is going to frame them in the context of the initial anchor. With a traditional waterfall approach, the user has to create the requirements without an anchor. This leads to unnecessary requirements and unused features because the anchor isn't present. There doesn't exist a "good" or "bad" context to help shape the program, there is only air. By creating an initial draft of the program, we create an anchor that guides the user, giving them the all important context that ensures a successful program.

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