The Anchoring Effect in Decision Making

29 Jul 2022

Bing Images
Making decisions is a part of life. We have to make decisions every day, both big and small. The way that we make these decisions can be affected by our biases.
 In this blog post, we will discuss a type of bias that can impact our decision-making process. Understanding biases can help you make better decisions and improve your life!
One type of bias that can impact our decision-making process is the anchoring effect. 

The anchoring effect is when we rely too heavily on one piece of information to make a decision.

This information is called the "anchor." For example, let's say you are trying to decide how much to spend on a new car. You may Anchor on the price of the most expensive car you have ever seen and then use that as a reference point for making your decision. This Anchor may be completely unrelated to the car you are actually trying to buy, but it can still have a significant impact on your decision.
Kahneman, D 2011, undertook an experiment where subjects were primed with an anchor before being asked a question. There was a significant difference between responses in the High anchor group and those in the low anchor group and also where no anchor was provided.
The anchoring effect can lead to suboptimal decisions because it Anchors us to a particular piece of information, even if that information is not relevant. In the example above, Anchoring on the price of the most expensive car you have ever seen may lead you to spend more money than you need to on your new car.

Anchoring can also lead us to make decisions that we later regret because we Anchored on the wrong piece of information. A salesman exploits this!
If you want to avoid the anchoring effect, it is important to be aware of it. Anchoring can happen unconsciously, so it is important to be mindful of the Anchors that you are using when making decisions.

When you are Anchoring on a piece of information, ask yourself if it is actually relevant to the decision you are trying to make. If it is not, then Anchoring on that information is not going to help you make a better decision.
The anchoring effect is just one of many biases that can impact our decision-making process. Have you experienced these tactics by salespeople?

References (Example)

[1] Kahneman Daniel, Thinking Fast and Slow, 2011
[2] BULB, 'Write to Earn. Read to Earn' (online, 2022) <>

Write & Read to Earn with BULB

Learn More

Enjoy this blog? Subscribe to Napes


well thats not the case here in many countries and it should be feel good if we were not there
south coast surfer
This is a common trait in Salespeople - and for some, it can’t be taught. Singling out that salesperson who’s prime objective isn’t to line his own pocket is the key. Nice blog.
Very brilliant writing
Johnson Chau
Anchoring can happen in teams too - especially when a solution is suggested/pitched too early. I personally found that taking a bottom up approach of looking at the problem first and then coming up with solutions helps prevent anchoring. Thank you for sharing!
I like how you related the topic to the image
@Napes I have experienced the anchoring effect. Salespeople often start with an expensive item or service to set a high anchor and then offer discounts to make it seem like a better deal. It's a common tactic to influence customers into buying something they may not need or want. I'm sure we've all made decisions that we later regret. This is some great stuff - thanks for sharing, Napes! 🚀🚀🚀 💡💡💡
This is very common We should take decision wery calmy