Anchoring Effect
What is the Anchoring Effect?
The anchoring effect is a cognitive bias in which people unconsciously rely on the first value mentioned (the “anchor”) when making assessments. In negotiations, the first offer therefore strongly shapes the further course.
Anchoring Effect in Detail
The anchoring effect (anchoring) was described in 1974 by the psychologists Amos Tversky and Daniel Kahneman. In their famous experiment, a random number from a wheel of fortune clearly influenced participants' subsequent estimates – even though the number was objectively irrelevant. In negotiations, the effect is particularly strong: the first concrete offer sets a frame of reference to which all subsequent concessions are oriented, rather than to the actual market situation. Whoever sets the first anchor therefore often has an advantage (first-offer advantage). At the same time, you can defend against others' anchors by consciously recognizing them and countering with your own, well-founded values.
In practice, the anchoring effect is at work in almost every negotiation, often unconsciously: the first number mentioned shapes the entire further course, because all subsequent offers are oriented to it. Whoever sets the first anchor can define the frame – provided the value is ambitious but justifiable. It is equally important to recognize others' anchors and not follow them uncritically: a deliberately set counter-anchor, or questioning the basis, helps you break free. Good preparation is decisive, because only those who know their own target range and realistic market values can set anchors confidently and withstand the anchoring effect of others.
How does the Anchoring Effect work?
A value that is mentioned activates a reference point in the other person's mind. Subsequent adjustments are typically too small, so the result stays close to the anchor. Those who anchor actively state an ambitious but justified first value; those who protect themselves name the anchor openly and introduce their own, factually substantiated number.
Anchoring Effect – Examples in Practice
A seller first names a high list price, against which the later discount is measured. In a salary negotiation, the candidate first names an ambitious, market-appropriate figure. A buyer deliberately counters an inflated offer with their own, clearly justified counter-anchor.
Anchoring Effect: Key Features at a Glance
- First value dominates: the first value shapes the frame of reference
- First-offer advantage: whoever anchors steers the course
- Robust bias: works even with irrelevant numbers
- Countermeasure: recognize the anchor and counter with your own value
- Prerequisite: the anchor must appear justifiable
Related Terms
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Anchoring Effect: Frequently Asked Questions
Who discovered the anchoring effect?
The psychologists Amos Tversky and Daniel Kahneman described it in 1974 as part of their research on cognitive biases (the anchoring-and-adjustment heuristic).
Why is the anchoring effect important in negotiations?
Because the first concrete offer sets a frame of reference to which all further steps are oriented. A well-set anchor shifts the outcome in your favor.
Should you make the first offer?
Often yes: the first-offer advantage speaks for it, provided you know the market and can justify the anchor. When there is great uncertainty about the value, restraint may be wiser.
How do you protect yourself against others' anchors?
By consciously recognizing the anchor, not accepting it as the starting point, and introducing your own, factually justified figure as a counter-anchor.