Anchoring Bias
The first piece of information you receive disproportionately influences all subsequent judgments, even when it's irrelevant.
See a $500 jacket marked down to $200? Feels like a great deal. But if you first saw it listed at $200, you'd think twice. The original price 'anchors' your perception of value.
Negotiators use this ruthlessly. The first number thrown out in a salary negotiation, home price discussion, or business deal becomes the anchor around which everything revolves.
Even completely random anchors affect us. Studies show that asking people if Gandhi died before or after age 140 (vs. age 9) changes their estimates of his actual age of death by years.
To resist: generate your own anchor before negotiations. Research fair prices independently. Never let the other party drop the first number without preparation.
Anchoring Bias
"The first number you hear is the number that matters most."
Set your own anchor first
Before negotiations, research and establish your independent valuation. Write it down. This becomes your mental anchor instead of theirs.
- Research comparable data
- Write down your number first
- Don't adjust from their anchor
Recognize anchoring attempts
When someone throws out a number first, pause. Recognize the anchor. Mentally reset by thinking about your research, not their number.
Use strategic anchors
In negotiations where you have leverage, anchor first with a well-researched ambitious number. Make them adjust to your frame.
Anchoring is invisible but powerful. The first number sets the frame. Control the frame, control the outcome.