Anchoring Bias

Type: Cognitive Bias
Local HTML: anchoring_bias.html

---

Definition

The first number you hear becomes an anchor that warps all subsequent estimates and decisions.

Completely arbitrary numbers affect judgments. The asking price for a house. The first offer in negotiation. A random number spun on a wheel.

---

Why It Matters

Negotiations: First offer sets the range. Whoever anchors first has advantage. Pricing: $199seemscheapcomparedto$200, expensive compared to $99. Estimates: “Is the Mississippi longer or shorter than 500 miles?” — The 500 becomes the anchor. Salaries: Your first salary anchors all future raises.

---

The Experiment

Kahneman & Tversky’s classic:

1. Spin a wheel (random number 10 or 65)
2. “Is % of African countries in UN higher or lower than [number]?”
3. “What’s your actual estimate?”

Result: Those who saw 10 estimated 25%. Those who saw 65 estimated 45%. Same question, different anchor.

---

Fighting It

1. Be aware — Recognize when an anchor is being set
2. Reject the anchor — “That number is irrelevant to me”
3. Set your own — Research independent values first
4. Anchor first — In negotiations, make the first offer

---

Related Biases

• Availability Heuristic — Recent numbers are available anchors
• Adjustment Heuristic — We adjust from anchors, insufficiently

---

Audio

Podcast episode: Anchoring Bias

---

Part of the Cognitive Bias Reference