BiasesJudgment & probability
Anchoring
Also called Anchoring effect · Anchoring and adjustment
Letting the first number you see pull your judgment toward it, even when it's irrelevant.
Definition
Anchoring is the tendency for an initial number to pull later estimates toward it, even when that number has nothing to do with the question.
The first figure on the table becomes a reference point. People adjust away from it, but not far enough. It shows up in prices, salaries, budgets, and legal sentences, and it works on experts as well as beginners.
How it works
In a famous 1974 experiment, Amos Tversky and Daniel Kahneman spun a rigged wheel of fortune that stopped at either 10 or 65, then asked people to estimate the percentage of African countries in the United Nations. People who saw 10 gave a median estimate of 25%. People who saw 65 gave 45%. The wheel was obviously random, and it still moved their answers by 20 points.
The anchor seems to work in two ways. People start from it and adjust in the direction they think is right, but stop too early. And the anchor makes information consistent with it come to mind more easily, so it shapes what people think about while forming a judgment.
How to spot it
The first number you heard keeps coming back to mind when you estimate.
A “was” price makes a sale price feel like a bargain.
Negotiations settle near whoever named a number first.
Your estimate changes a lot depending on which number someone mentions beforehand.
You can’t say where your number came from, except that it seemed close to something you heard.
Examples
01Judges rolling dice
In a 2006 study, experienced German judges read a shoplifting case and then rolled dice that had been loaded to land on either a high or a low number. They were asked whether the sentence should be higher or lower than that number, then to give their own sentence. Judges who rolled high gave substantially longer sentences than those who rolled low.
What went wrong
The judges knew the dice were random, and their expertise didn’t protect them. An irrelevant number shaped a decision about someone’s liberty.
02The listing price
In a 1987 study, real-estate agents and students toured the same house but were given different listing prices. Their appraisals moved with the listing price they’d been given, and the experienced agents were swayed about as much as the students.
What went wrong
Years of experience pricing homes didn’t protect the agents from a number that was simply handed to them. The anchor did its work even on people whose job is to know what a house is worth.
03The opening ask in a budget fight
In a budget negotiation, one side opens with a demand for a huge cut, far beyond what anyone expects to pass. The final deal lands at a cut much larger than the original “reasonable” middle.
What went wrong
The extreme opening wasn’t meant to pass. It moved the reference point, so the eventual compromise looked moderate by comparison. Both parties use this approach in negotiations.
Why we do it
When we’re uncertain, any number is a place to start, and starting somewhere is easier than starting from nothing. In everyday life, the numbers people mention are usually relevant, so leaning on them often works. The cost is that the mind doesn’t check whether this particular number deserves the weight.
Check yourself
1Generate your own number first
Before you look at a price, a proposal, or someone else’s estimate, write down your own.
What would I have guessed if I’d never heard that number?
2Consider the opposite anchor
Imagine the first number had been very different, and ask how your judgment would change.
If they’d opened at half that, where would I have landed?
3Look for an outside reference
Replace the anchor with data that isn’t controlled by the person who named it.
What do comparable cases actually show, regardless of what was just said?
When the shortcut is reasonable
Starting from a relevant reference point is good reasoning. If you’re estimating a house price, starting from recent sales of similar houses and adjusting for differences is exactly the right method. The anchor is useful when it carries real information.
The bias is in being pulled by numbers that carry no information, like a random roll, an arbitrary “was” price, or a deliberately extreme opening ask. The question to keep asking is whether the number is evidence or just the first thing you heard.
Sources & further reading
- Amos Tversky and Daniel Kahneman, “Judgment under Uncertainty: Heuristics and Biases,” Science 185 (1974): 1124–1131.
- Birte Englich, Thomas Mussweiler and Fritz Strack, “Playing Dice with Criminal Sentences: The Influence of Irrelevant Anchors on Experts’ Judicial Decision Making,” Personality and Social Psychology Bulletin 32, no. 2 (2006): 188–200.
- Gregory Northcraft and Margaret Neale, “Experts, Amateurs, and Real Estate: An Anchoring-and-Adjustment Perspective on Property Pricing Decisions,” Organizational Behavior and Human Decision Processes 39 (1987): 84–97.
- Daniel Kahneman, Thinking, Fast and Slow (Farrar, Straus and Giroux, 2011).
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