Anchoring

What Anchoring means

Anchoring is the tendency for any number present when an estimate is made to drag the estimate toward itself. The mind does not compute an unknown quantity from nothing; it starts from whatever value is in view and adjusts away from it until the answer feels plausible, and it stops adjusting too soon. Owning this changes how we walk into any room where a number will be decided. We ask what figure was already on the table before the estimate began, and who put it there. We arrive with our own starting point rather than inheriting the seller's, the opening bid's or the last number said aloud. Before, the first offer in a negotiation was just an offer. After, it is the thing every later number will be measured against, and we treat the right to name it as worth real money.

Anchoring examples: where it shows up

• At work: a salary negotiation settles within reach of whichever side spoke a figure first, and the side that waited adjusts away from a number it never chose.
• With money: a house is valued by experienced agents who deny the asking price entered their thinking, while their valuations track it closely.
• In the news: a government floats a large figure for a project and the eventual cost is reported as a saving against a number that was never real.

Where it sits

Open to walk. See where Anchoring sits on the sky →

Nearest on the sky

• Base-Rate Neglect
• Disposition Effect
• First Principles Thinking
• The Framing Effect
• Hindsight Bias
• Loss Aversion

A filled dot marks a star that is already open to walk.