Anchoring Bias: How Your Mind Tricks You Into Wrong Decisions
And how you can overcome this effect
How many new thoughts do you think the average person has in a day?
Pause for a moment. Try to come up with a number.
Now, here’s a photo of a team that’s won a $100,000 prize at an IT contest.
$100,000! Not bad, huh?
Hold on. Did you come up with a guess? Does it sound close to, say, 100,000? Maybe a little higher? Lower? Or maybe you’re thinking, “Yeah, that sounds about right: 100,000 thoughts a day.”
But here’s the truth.
That 100,000 I just threw at you: Completely random.
The number of thoughts a person has per day has nothing to do with that number, but it did stick to your mind for a bit, didn’t it?
That’s anchoring bias in action. You adjusted your guess based on a random figure that had absolutely nothing to do with the real number. And this happens all the time.
Anchoring bias is one of the sneakiest cognitive traps. It shapes your judgment without you even realizing it. Whether you’re deciding on a purchase, estimating how long a project will take, or making a life-changing decision, anchoring is there, quietly nudging you.
Even if the first piece of information you get is irrelevant or misleading.
Look again at the example I gave you.
The actual number (based on a 2020 study) is closer to 6,200 new thoughts. That’s significantly far from the anchor I gave you. Side note: A good article in Healthline simplifies this study nicely. Go have a read (after you’ve finished this, of course) if you’re interested.
Now you see how easily your mind can be anchored.
But don’t worry! I’m going to teach you how to spot anchoring bias and, more importantly, how to break free from it.
So, make sure you read until the end. You’ll be surprised by how easily your mind can be fooled.
What is Anchoring Bias?
Anchoring bias is when your mind clings to the first bit of information it gets. That piece of info becomes the “anchor,” and everything else you think or decide adjusts based on that.
It doesn’t matter if the anchor is wrong. It still sways you.
I like this sketch below by Versus the Machines because not only does it illustrate the anchoring effect well, but it also shows the absurdity of a $300 mug!
This anchoring phenomenon was famously demonstrated by Kahneman and Tversky in an experiment.
Participants were asked to estimate the percentage of African countries in the United Nations. But before they guessed, they were given a random number by spinning a wheel.
Those who spun a higher number guessed significantly higher percentages than those who spun a lower number despite the number on the wheel being irrelevant. This showed how even random numbers can anchor our thoughts, pushing our guesses closer to the anchor point.
Anchoring doesn’t just happen in trivial guessing games. It occurs in everyday life and often in much higher-stakes situations.
Salary negotiations, for instance, are highly susceptible to anchoring. The first number thrown out, whether low or high, sets the stage for the entire negotiation.
Even when you know better, it’s hard to escape the influence of that first figure.
Why Are We So Easily Anchored?
The reason anchoring is so effective lies in a mental shortcut called the anchoring and adjustment heuristic.
This mechanism explains why, when faced with uncertainty, we latch onto the first piece of information we receive and adjust from there.
The problem? We rarely adjust enough.
For example, in one study, participants were asked how long it takes Mars to orbit the sun.
Most people didn’t know the exact answer, so they used Jupiter’s 12-year orbit as a reference point, or anchor, and adjusted downward.
But their adjustments were too small, leaving their estimates far from the real answer, which is just 1.88 years.
This mental shortcut is great when we need to make quick decisions, but it can lead to errors when we’re dealing with complex problems.
Our brains cling to that first piece of information because it’s easier than starting from scratch or considering a wide range of possibilities.
The Real Danger of Anchoring Bias
Anchoring bias goes beyond simple trivia and hypothetical situations; it impacts real-world decisions and can cause serious lapses in judgment.
Take the judicial system, for example. A study by Englich and Mussweiler on criminal sentencing found that even experienced judges were influenced by anchoring.
When prosecutors requested harsher sentences, judges tended to issue longer sentences than when lighter sentences were suggested.
The same effect shows up in consumer behavior. Have you ever wondered why so many products are priced at $9.99 instead of $10?
That small difference anchors your perception, making $9.99 seem much cheaper than it really is. The first digit of the price (9) anchors you, and your brain ignores the fact that the actual price is nearly $10.
Even in medical settings, anchoring bias can lead to dangerous outcomes. Doctors might focus on the first symptom a patient reports and fail to adjust their diagnosis based on additional information, leading to misdiagnosis or inappropriate treatments.
How to Overcome Anchoring Bias
Anchoring bias is powerful, but there are ways to weaken its influence. Let’s break down three key steps you can take to spot and overcome this bias, each backed by research and practical tips.
Step 1: Recognize the Anchor
Awareness is your first line of defense. The moment you recognize an anchor being set — whether in a conversation, a price tag, or an initial offer — you’re already halfway to overcoming it.
Why it works: According to Tversky and Kahneman, once we recognize that an anchor has been placed in our minds, we become more critical of it. This acknowledgment creates a mental buffer, allowing us to assess the anchor more objectively instead of taking it at face value.
How to apply it: When negotiating or making a decision, pause for a second. Ask yourself, “Is this number, fact, or figure the first I’ve heard on this topic?” If so, flag it as a potential anchor.
Step 2: Seek Out More Information
Once you recognize the anchor, resist the urge to make a quick decision. Instead, gather more information. Anchors are most powerful when we lack context, so the more data you have, the weaker the anchor becomes.
Why it works: Research on behavior shows that people who compare multiple options, like prices, product reviews, or salary data, are better equipped to avoid anchoring. When we expose ourselves to a wider range of information, we dilute the influence of the initial anchor.
How to apply it: If you’re about to make a purchase or negotiate an offer, research comparable figures. For instance, if negotiating a salary, look up the typical salary range for that role and industry. Getting multiple sources helps you move away from the first number you hear.
Step 3: Delay Your Decision
Anchoring bias thrives on quick judgments. Slowing down the decision-making process gives your brain time to fully process all the information, making it easier to move past the initial anchor.
Why it works: In research on decision-making, participants who delayed their choices were significantly less likely to be influenced by anchors than those who made immediate decisions. Time allows us to recalibrate and consider alternatives that might not have been obvious in the heat of the moment.
How to apply it: Whenever possible, delay your decision, even by a few minutes. For example, in a negotiation, tell the other party, “Let me think about it and get back to you.” This breaks the urgency of the moment and gives you a chance to reset your thinking.
Practical Exercise: Salary Negotiation
Let’s look at how anchoring bias plays out in a common real-world scenario: salary negotiations.
Many people feel uncomfortable when asked for their expected salary, fearing they’ll overshoot or undershoot the employer’s range. Here’s how you can overcome anchoring bias in this situation.
Scenario
You’re in a job interview, and the recruiter asks, “What salary are you expecting for this role?”
This is where anchoring bias can strike.
If you throw out a low number, it becomes the anchor for the negotiation, and any future offer will likely hover around that figure.
If you go too high, you risk pricing yourself out of the role.
What do you do?
Step-by-Step Strategy
- Recognize the Anchor Trap: The recruiter is subtly inviting you to anchor the salary discussion. By getting you to name a number first, they can frame the conversation around that figure. You’ve recognized this — great! Now, don’t fall for it.
- Flip the Script: Instead of giving a number right away, politely turn the question back to the recruiter. Say something like:
“I’m sure you have a range in mind for this role. Could you share that with me first?”
This tactic puts the ball in their court and prevents you from anchoring the conversation to a potentially lower number than they might have offered. Often, employers will reveal a higher figure than what you were considering. - Delay and Research: If they push for a number, buy yourself some time. You can say: “I’d love to learn more about the scope of responsibilities and the benefits package before finalizing my expectations.”
Meanwhile, if you have time before your final decision, do your research. Look up salary ranges for similar positions in your industry. Websites like Glassdoor or Payscale can give you a broader range, helping you avoid being anchored by just one figure. - Prepare Multiple Anchors: When you’re ready to discuss salary, use multiple reference points. For example, say: “Based on my research, I’ve seen similar roles range between $60,000 and $80,000, depending on responsibilities. Given the scope of this role, I’d expect something within that range.”
This gives you flexibility and prevents the conversation from being locked onto a single anchor. You’ve now set a range, which gives you room to negotiate up. - Challenge the Anchor: If the recruiter throws out a low anchor, don’t feel pressured to accept it. Instead, challenge the figure: “Based on what I’ve seen in the industry, $50,000 seems a bit below the standard for this role. Could we look at adjusting it to be more in line with market rates?”
This shows that you’re knowledgeable and assertive, and it pushes the recruiter to reconsider their initial offer.
Key Takeaway
Anchoring bias can be tricky, especially in high-stakes situations like salary negotiations. But by recognizing the anchor, flipping the script, doing your research, and giving yourself time, you can take control of the conversation and, ultimately, the outcome.
By applying these steps, you can avoid falling into the anchoring trap and negotiate with confidence, ensuring you’re getting a fair offer based on real data, not the first number that comes your way.
Anchoring bias is everywhere. But once you know how to spot it, you can break free from its influence.
So, the next time you’re making a decision, remember:
The first number isn’t always the truth.
By recognizing this bias, you can start questioning those initial numbers and see beyond the surface.
How do you approach anchoring bias? Share your experience in the comments.
If you’re interested in such content, check out my other article on confirmation bias and how you can break free from it.
