Anchoring Effect

You have probably walked into a department store and seen a piece of clothing with a red line through its original price of 100,000 won and a tag that says 'Special sale: 30,000 won.' In that moment, you think, 'I saved a whole 70,000 won!' and feel pretty good.

But what if the item had always cost 30,000 won? If the tag had said 30,000 won from the start, you might not have bought it at all. The '100,000 won' you saw first dropped an anchor in your mind. When the first piece of information becomes a reference point that shapes every judgment after it, we call that the anchoring effect.

The same thing happens when you sell a used item. If the seller names a high price first, the buyer may haggle it down, but the deal still tends to land close to that first price. The opening price has already become the reference point for everyone's thinking.

Here is the surprising part. A number you see first works as an anchor even when it has nothing to do with the question. In a 1974 experiment, psychologists Daniel Kahneman and Amos Tversky had people spin a wheel marked 0 to 100. The wheel was secretly rigged to stop only on 10 or 65.

Then they asked people what percentage of United Nations member countries are African. People who saw 10 on the wheel gave a median answer of 25%. People who saw 65 gave 45%. The number was pure chance, yet the brain used it as a starting point without people noticing and adjusted from there.

Our brains do not like to calculate every piece of information one by one. They prefer to grab whatever is in front of them as a shortcut and decide fast. The less you know about the right answer, the harder you hold on to the first number you hear.

To put it more precisely, the anchoring effect does not mean people are foolish. It is a natural error that comes from a rule of thumb (a heuristic) your brain uses to save energy in a complicated world.

Picking a starting point and nudging up or down from there is quite efficient in daily life. The trouble comes when that starting point is nonsense, or when someone picked it on purpose to steer you. And just telling yourself 'I'll be careful' is not enough to break free.

The best approach is to set your own objective benchmark before you hear the other side's first price. Then force yourself to argue the opposite: 'If their number were completely wrong, what would this really be worth?' That one question goes a long way toward cutting the anchor line.