A Good Mind

Anchoring refers to a cognitive bias where an individual relies too heavily on the first piece of information they encounter (the "anchor") when making decisions. Introduced by psychologists Amos Tversky and Daniel Kahneman, this bias can significantly influence the judgement and decision-making process.

Anchoring often occurs when people are dealing with complex situations involving uncertainty. For instance, in negotiations, the first price set can serve as an anchor that influences subsequent offers. If the initial price is high, subsequent counteroffers are likely to be closer to this anchor, even if it's not reflective of the item's true value.

In everyday life, anchoring can impact a wide array of decisions. It can affect perceptions of value in financial decisions, influence estimations of quantities or probabilities, and even shape social judgements about others. For example, a person might judge someone's personality based on a first impression, which then becomes the anchor for all future interactions.

Awareness of anchoring can be crucial in overcoming this bias. By recognising the potential influence of initial information, individuals can adjust their decision-making process. They might seek out additional information, consider alternatives, or consciously adjust their judgements away from the anchor.

Despite these potential strategies, completely avoiding the influence of anchoring can be challenging. This is because anchoring often operates unconsciously, influencing decisions without one's explicit awareness. Nonetheless, understanding this bias represents a significant step towards more informed and balanced decision making.