Psychology
Anchoring Bias
Quick fact
In a famous study, participants who were asked whether the Mississippi River was longer than 2,000 miles gave higher estimates than those asked if it was longer than 200 miles—demonstrating the power of an arbitrary anchor.
Why this is interesting
Have you ever noticed that the first price you see for a product often sets your expectation for what it's worth—even if that price was completely arbitrary?
Read the full explanation
Understanding Anchoring Bias
Imagine you're haggling over a used car. The seller starts with a high price. That number becomes an anchor. Even though you know it's high, all your counteroffers will be influenced by it. You might end up paying more than if the seller had started lower. Anchoring works because our brains use the first information as a reference point, and we adjust insufficiently from it.
A deeper explanation
Anchoring bias, first documented by Tversky and Kahneman in 1974, occurs due to insufficient adjustment from an initial value. When making estimates, people start with an anchor and then adjust upwards or downwards to reach a final answer. However, adjustments are typically inadequate, leaving the final judgment biased toward the anchor. Anchors can be arbitrary or irrelevant, yet they still exert influence. This bias is robust in real-world contexts like pricing, legal judgments, and negotiations. Recognizing it allows individuals to consciously disregard or re-evaluate the anchor.