Anchoring
The first number you see quietly drags every later estimate towards it.
Also known as: Anchoring-and-adjustment
beginner Attributed to Amos Tversky & Daniel Kahneman · Heuristics-and-biases research
Anchoring is the tendency to rely too heavily on the first piece of information — the "anchor" — when making judgements. Subsequent estimates adjust away from the anchor, but usually not far enough, so the anchor keeps distorting the answer even when it's arbitrary.
What it is
Kahneman and Tversky showed that even an obviously random number can move people's estimates. Ask people whether the population of a country is more or less than a spun-wheel number, then ask for their actual estimate, and the arbitrary number pulls their guesses toward it. The anchor doesn't have to be relevant to have an effect.
In practice, anchors are everywhere: the sticker price you negotiate down from, the first salary figure mentioned, the initial project estimate that all revisions cluster around. Because adjustment is insufficient, whoever sets the anchor exerts outsized influence on the final number.
The effect persists even when people know about it and try to resist — awareness helps a little, but the anchor still tugs.
Worked example
A house is listed at £500,000. Buyers now negotiate around that figure — offering £470,000 feels like a discount. Had the identical house been listed at £430,000, the same buyers would anchor there and £470,000 would feel like an overpayment. The house didn't change; the opening number reset everyone's sense of a fair price.
How to counter it
As a bias, the harm is being moved by an anchor that carries no real information. The counter isn't to ignore all first numbers — sometimes the anchor is genuinely informative — but to generate your own independent estimate before you're exposed to someone else's figure, so you can tell whether you're adjusting from evidence or from their anchor.
How to apply it
- Form your own estimate before hearing anyone else's number.
- When given an anchor, ask whether it carries real information or is arbitrary.
- In negotiations, be aware that whoever moves first sets the anchor.
- Re-derive important figures from scratch rather than adjusting off a given one.
Related entries
Sources & further reading
Thinking, Fast and Slow
by Daniel Kahneman · book
Kahneman and Tversky's anchoring experiments are described in detail.
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