Anchoring
Anchoring
Anchoring is a cognitive bias in which individuals rely too heavily on the first piece of information encountered (the “anchor”) when making decisions. This initial information serves as a reference point, influencing subsequent judgments and evaluations.
Examples
- In a salary negotiation, if a candidate first hears an offered salary of $50,000, they may perceive future offers as more reasonable if they are close to that figure, even if the market rate is significantly higher.
- A shopper sees a dress priced at $200, then finds a similar one marked down to $120. The original price anchors their perception, making the $120 seem like a good deal, regardless of its actual value.
Cases
- In legal settings, jurors may anchor their damage awards based on the prosecution’s initial claim, leading to inflated or deflated compensation amounts based on that first figure.
- In real estate, when a home is listed for $500,000, potential buyers may anchor their offers around that price, even if the home’s market value is lower or higher.