What is Anchoring Bias?
Anchoring bias is the tendency to rely too heavily on the first piece of information encountered (the "anchor") when making decisions. Even when the anchor is completely irrelevant, it influences our subsequent judgments and estimates.
Key Insight
The anchor doesn't need to be related to the decision at hand. Even random numbers can influence our judgments if presented as an initial reference point.
How Anchoring Works
Once an anchor is set, we tend to adjust our estimates from that starting point, but the adjustment is usually insufficient. This leads to final judgments that are biased toward the initial anchor value.
Real-World Examples
💰 Negotiations
The first offer in a negotiation sets an anchor that influences the final agreement, even when both parties know it's a starting point.
🏠 Real Estate
The listing price of a house anchors buyers' perceptions of its value, affecting their willingness to pay.
⚖️ Legal Judgments
Judges' sentences can be influenced by prosecutors' initial sentencing recommendations, even when they try to be objective.
🛒 Retail Pricing
"Was $100, now $70" makes $70 seem like a great deal, even if the item was never actually sold at $100.
How to Overcome Anchoring Bias
1. Consider Multiple Reference Points
Before making a decision, deliberately seek out different starting points and perspectives.
2. Research Independently
Gather your own information before being exposed to others' estimates or suggestions.
3. Use the "Consider the Opposite" Technique
Ask yourself what factors might push the true value in the opposite direction from the anchor.
4. Delay Initial Judgments
Avoid forming quick impressions. Give yourself time to process information without being anchored to first impressions.
Experience Anchoring Bias Yourself
See how powerfully anchoring can influence your own judgments with our interactive test based on classic psychology experiments.
Take the Anchoring Bias Test