Anchoring Effect
The first number we encounter disproportionately shapes all subsequent judgments.
Origin & History
The Anchoring Effect was identified by psychologists Amos Tversky and Daniel Kahneman in their 1974 paper 'Judgment Under Uncertainty: Heuristics and Biases.' They demonstrated that people's numerical estimates are strongly influenced by an initial value — the anchor — even when that value is clearly arbitrary. Kahneman later described anchoring as one of the most robust and difficult-to-eliminate cognitive biases, noting that it persists even when people are explicitly warned about it.
Real-World Examples
A salesman shows a $52,000 car first, then a $31,000 car. The buyer feels they're getting a deal. Another buyer shown only the $31,000 car negotiates harder and pays $4,000 less. The first number set the psychological reference point.
Job candidates who name a salary first — even a high one — consistently receive better offers than those who wait. The initial number anchors the negotiation range even when the employer was planning to offer more.
Donation forms that suggest high amounts ($100, $250, $500) produce larger average donations than those suggesting low amounts ($5, $10, $20) — because the suggested amounts anchor expectations of what's appropriate.
Why It Matters
The Anchoring Effect is one of the most actionable cognitive biases because it operates even when people are aware of it. In any negotiation, the party that sets the first number gains a structural advantage. In pricing, the first price seen sets the reference against which all subsequent prices are judged. In evaluation, the first score or rating anchors all subsequent ratings. The practical countermeasure: form your own independent estimate before being exposed to any external number.
Related Laws
Can You Spot Anchoring Effect in the Wild?
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The cognitive bias where the first number or piece of information encountered disproportionately shapes all subsequent judgments — even when the anchor is clearly arbitrary.
Amos Tversky and Daniel Kahneman identified and named it in their 1974 paper on judgment and decision-making heuristics.
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