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Anchoring Bias

Definition

Anchoring bias is a cognitive bias that causes us to rely too heavily on the first piece of information we are given about a topic (the "anchor") when making decisions.

Analogy

Imagine you're buying a car and the salesman tells you the price is $20,000. Even if you negotiate lower, that initial price will be your anchor and will influence how much you're willing to pay.

Related terms

Confirmation Bias: The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Framing Effect: This refers to how presenting the same option in different formats can alter people's decisions. Like choosing between "75% lean" and "25% fat" ground beef - both descriptions refer to the same product but may lead to different choices.

Availability Heuristic: This is relying on immediate examples that come to mind when evaluating a specific topic, concept, method or decision. Like judging whether planes or cars are more dangerous based on recent news reports rather than statistical data.