The Anchoring Effect: How the First Number Controls Your Decision

Short answer

When you see a number first, it becomes an “anchor” — a reference point. All your subsequent estimates are unconsciously made relative to that number, even if it’s random and completely irrelevant.

The classic experiment

Psychologists Kahneman and Tversky spun a wheel of fortune in front of participants. The wheel was rigged — it landed on either 10 or 65.

Then they asked: “What percentage of African countries are members of the UN?”

• Those who got 10 answered on average 25%
• Those who got 65 answered on average 45%

The random number from the wheel had nothing to do with the question. But it became an anchor.

Where it works in real life

Stores. A crossed-out price of $200 next to a new price of $100 — that’s an anchor. Without the crossed-out price, you’d evaluate the product differently.

Negotiations. Whoever names a number first sets the anchor. If you ask for a $100,000 salary, the negotiation starts from there — not from $60,000.

Restaurant menus. A $50 dish at the top of the menu makes a $15 dish feel “cheap” — even though without the anchor you might consider it expensive.

How to protect yourself

• Recognize the anchor. Simply knowing about this effect already reduces its influence.
• Set your own reference points. Before looking at the price, ask yourself: how much are you willing to pay?
• Use it to your advantage. In negotiations, make the first offer yourself.

Remember

The first number you see controls all your subsequent estimates — even if it’s random. Knowing this, you can stop being a victim and start using anchors consciously.