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What is the anchoring effect?

PsychologyLesson on requestFree to read

Quick answer

The anchoring effect is a bias where the first number or piece of information you see heavily influences your later judgments. For example, a high 'original price' makes a sale price feel like a great deal, even if it isn't.

Key things to understand

  1. The first information seen 'anchors' later estimates.
  2. We adjust away from the anchor, but usually not enough.
  3. Retailers use it with 'original' vs. 'sale' prices.
  4. It affects negotiations, pricing, and everyday decisions.

People also ask

What is the anchoring effect?
A bias where the first number or fact you encounter skews your later judgments and estimates.
How is anchoring used in marketing?
Showing a high 'original' price first makes the actual price feel like a bargain by comparison.
Can you avoid the anchoring effect?
Being aware of it, questioning the first figure, and seeking independent reference points all help.