PsychologicalDUAL-USE

Anchoring

What it is

Setting a reference point that influences subsequent judgments and decisions.

How it works

The first piece of information presented (the anchor) disproportionately shapes how people evaluate all later information. In negotiations, whoever sets the first number often controls the range of the discussion.

Real-world examples

•A car dealership lists the MSRP before showing the "discounted" price.
•A salary negotiation where the candidate names a high figure first.
•Showing the original price crossed out next to a sale price on an e-commerce site.

Historical case studies

Steve Jobs and the iPad pricing reveal

2010Product Launch

Jobs displayed "$999" on screen before revealing the actual $499 price, making the real price feel like a steal. The anchor made the audience perceive the iPad as dramatically underpriced.

The $67M pants lawsuit (Pearson v. Chung)

2007Legal

Administrative-law judge Roy Pearson sued a Washington DC dry cleaner for $67 million over a lost pair of pants, later amended to $54 million before trial. Court found for the cleaner. The extreme anchor became the story — every discussion of the case oriented around how far below $67M any "reasonable" figure sat.

Source →

UN General Assembly wheel experiment

1974Research

Tversky and Kahneman had participants spin a rigged wheel before estimating what percentage of United Nations member states are African countries. Those whose wheel landed on 65 gave a median estimate of 45%; those whose wheel landed on 10 gave 25%. A demonstrably random anchor shifted judgments by 20 percentage points on a factual question the anchor had no bearing on.

Source →

Ethical guidelines

Where the line is

Anchoring is legitimate persuasion when the anchor is grounded in genuine value the audience can evaluate. It crosses into manipulation when the anchor is fabricated, hidden, or set with the intent to disable comparison — e.g. a fake original price, a "starting bid" the seller knows is disconnected from the item's value, or a first-offer number designed to be too extreme to argue against rather than to describe a real position.

●Use realistic anchors grounded in genuine value.
●Do not set an anchor you know to be deceptive or misleading.
●Disclose relevant context so the audience can calibrate fairly.

How to defend against it

►Always research independent benchmarks before entering a negotiation.
►Consciously ignore the first number and form your own assessment.
►Counter-anchor with your own well-researched figure.

References

Tversky, A., & Kahneman, D. (1974). Judgment under Uncertainty: Heuristics and Biases. Science, 185(4157), 1124–1131 · link
Original wheel-of-fortune anchoring experiment; UN-percentage estimation task described in Historical case studies.
Chapman, G. B., & Johnson, E. J. (2002). Incorporating the Irrelevant: Anchors in Judgments of Belief and Value. In Gilovich, Griffin, & Kahneman (Eds.), Heuristics and Biases: The Psychology of Intuitive Judgment (pp. 120–138) · link
Comprehensive review of anchoring effects across domains including negotiation and pricing.
Galinsky, A. D., & Mussweiler, T. (2001). First offers as anchors: The role of perspective-taking and negotiator focus. Journal of Personality and Social Psychology, 81(4), 657–669 · link
First-offer anchoring effects in negotiation — evidence for the "whoever names the first number" pattern.

Last reviewed 2026-08-29

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