anchoring effect

This study investigates the influence of two cognitive biases—the Halo Effect and Anchoring Cognitive Error—on the performance of urban leaders, with a specific focus on their implications for urban governance. Utilizing a mixed-methods qualitative approach, the research centers on a case study involving district mayors in the Tehran Municipality, employing purposive sampling techniques. Data collection for the qualitative component involved a thorough examination of pertinent texts, along with 20 semi-structured interviews conducted with urban leaders. The interviews were concluded upon reaching theoretical saturation. The findings indicate that the Halo Effect may lead urban leaders to overlook significant issues and potential criticisms, including instances of employee corruption and legal infractions. Similarly, the Anchoring Cognitive Error adversely affects decision-making by fostering intuitive judgments, limiting comprehensive understanding of issues, hindering stakeholder engagement, and resulting in erroneous prioritization. Such intuitive decision-making can stem from excessive self-confidence and reliance on personal judgment, while cognitive errors manifest as improper prioritization and inadequate resource management. This research highlights the necessity for urban leaders to address these cognitive biases to improve their decision-making processes and actions. The findings suggest that the Halo Effect may arise from structural challenges and managerial inadequacies, potentially linked to insufficient support from higher authorities or biased thinking that overlooks the principles of justice and dynamism within the governance framework. Furthermore, the study identifies five key factors contributing to Anchoring Cognitive Error: reliance on intuitive decision-making, a lack of a comprehensive understanding of issues, deficiencies in stakeholder interaction, neglect of intelligent management in response to rapid environmental changes, and incorrect prioritization coupled with resource management deficiencies. In conclusion, enhancing the performance of urban leaders necessitates structural reforms, increased awareness of the factors influencing decision-making and actions, and adaptability within the governance system. Urban leaders should proactively address cognitive errors, particularly the Halo Effect and Anchoring, by integrating awareness of these biases into their decision-making processes, ultimately aiming to improve policy implementation.