── ── Cognitive bias

Anchoring

When people estimate an unknown quantity they start from a reference point — an anchor — and adjust. The adjustment is almost always insufficient, so the final answer stays closer to the anchor than it should. This pattern holds even when the anchor is explicitly random and subjects are told to ignore it (Tversky & Kahneman 1974). It survives expertise…

How it works

Run the Anchoring Analysis. Detect anchors, judge their informational content, decide deliberately.

1. Identify the anchor. Name the specific number explicitly — it often arrives as casual mention, "data," or expectation, not as a labeled offer. 2. Classify informational content. Genuinely informative → use as evidence. Partial (real signal + proposer's interest) → discount. Pure anchor → treat as zero information; bias still operates, apply structural defense. 3. Run the anchor-free counterfactual. What number would you have produced without hearing the anchor? Write it down first. 4. Consider an opposite-side anchor. Deliberately generate a number in the opposite direction and articulate the reasons — not to use as a counter, but to break the asymmetry. 5. If proposer: open bold but defensible. Bold openers consistently outperform soft ones; absurd anchors lose power and damage the relationship. 6. If respondent: name it, reset with your own independently-generated number, or work with it knowingly — discounting your natural agreement point. 7. Audit hidden anchors in forecasts. Last quarter, board expectations, prior-year baselines are all anchors. Identify which is doing the work. 8. Stop-rule: if the analysis doesn't change the decision, you may have rationalized. Re-run the anchor-free counterfactual.

When to use it

• user says 'what's a fair price / starting number / ballpark'
• counterparty just opened with a number
• user is about to negotiate salary, valuation, or deal terms
• user is making a forecast and a number has already been floated
• user asks about 'first offer', 'framing effect', or 'being anchored'

Worked example

Tversky & Kahneman's Wheel of Fortune, 1974

The empirical foundation for anchoring as a strategic concern was established in a single, brief experiment described in a 1974 Science paper that has become one of the most-cited articles in 20th-century behavioral science. Amos Tversky and Daniel Kahneman, then collaborating between the Hebrew University of Jerusalem and the Oregon Research Institute, were systematically documenting the heuristics by which people produce estimates under uncertainty. Their paper "Judgment under Uncertainty: Heuristics and Biases" (Science, Vol. 185, No. 4157, 27 September 1974, pp. 1124–1131) introduced three heuristics…