Anchoring Effect
The first number you hear becomes the number everything else is measured against.
1. The First Number Wins
A house is listed at $950,000. You think it’s overpriced. You negotiate. You settle at $880,000 and feel like you won.
But the anchor was $950,000 — a number the seller chose. Your “win” was measured against their opening move.
This is the Anchoring Effect: the first piece of information we receive disproportionately shapes every judgment that follows. Even when we know the anchor is arbitrary. Even when we try to adjust away from it. We never adjust far enough.
2. Where It Shows Up
Salary negotiation. Whoever names a number first sets the range. The final number will be closer to that anchor than either side realizes.
Retail pricing. “Originally $200, now $120” works because $200 is the anchor. Without it, $120 is just a price. With it, $120 feels like a deal.
Legal judgments. Studies show that higher sentencing demands from prosecutors correlate with higher sentences — even when judges believe they’re deciding independently.
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The anchor doesn’t have to be credible. It just has to be first.
3. Why Adjusting Isn’t Enough
When we receive an anchor, we adjust — but we stop adjusting too soon. We stop when we reach a number that feels “plausible.” The anchor defines what plausible means.
The result: our final answer is always closer to the anchor than the evidence alone would justify.
4. The Question That Cuts Through It
What would I think if I had never seen that first number?
Strip the anchor. Rebuild the estimate from scratch — from your own data, your own comparables, your own reasoning. Then compare. The gap is how much the anchor moved you.
5. The One Thing to Remember
You think you’re adjusting from a starting point. You’re actually being pulled toward it.
The first number isn’t neutral. It’s a move.
