Anchoring bias is the tendency to rely too heavily on the first piece of information we encounter when making a judgement. That initial figure, the anchor, pulls our final estimate towards it, even when it is plainly arbitrary.
A striking demonstration
Amos Tversky and Daniel Kahneman spun a wheel of fortune rigged to land on 10 or 65, then asked people what percentage of African countries were in the United Nations. Those who saw the higher number gave markedly higher estimates. A figure everyone knew was random still dragged their answers along with it.
Why anchors stick
Once a number is on the table, we adjust away from it, but we typically stop adjusting too soon, settling near the anchor. The starting point also primes related thoughts, making information consistent with the anchor easier to recall. The effect persists even when people are warned about it and even when the anchor is absurd.
Where it is used on you
- Pricing. A high “recommended” price makes a discount feel generous.
- Negotiation. The first offer sets the range within which the rest of the haggling happens.
- Menus. An expensive dish at the top makes everything below look reasonable.
The takeaway
Anchoring means the order in which we meet information matters. When a number is offered first, it pays to set it aside, form your own estimate independently, and only then compare.
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