Anchoring Bias: How to Avoid Irrational Conclusions

Imagine that you’re out shopping, and as you walk into a clothing store, you spot a jacket you like.

You try it on, check yourself out in the mirror, and decide you have to have it.

Now, imagine the following two scenarios:

  1. You check the price tag, and the jacket is $500. But a salesperson walks by and says: “I’m sorry. That price is wrong. The jacket is really $300.”
  2. You check the price tag, and the jacket is $100. But a salesperson walks by and says: “I’m sorry. That price is wrong. The jacket is really $300.”

Which Jacket Would You Buy?

If you’re like most people, you’re much more likely to buy the jacket in the first scenario.

But that doesn’t really make sense, does it? After all, the price you’d have to pay are exactly the same in both scenarios.

So, how come we’re more comfortable buying in the first one?

The answer is what psychologists refer to as anchoring 1. As soon as we’ve read the price tag, we’ll use it as a reference point — an anchor — for everything that happens after that.

If the initial price was higher, we’ll feel like we’re getting a good deal. And if the initial price was lower, we’ll feel like we’re getting a bad deal.

Marketing Anchors

Marketers are well aware of this bias and use it to their advantage all the time. Here are some examples of anchoring strategies often used in marketing:

  • Original vs discounted price — Retailers often present the old price of a product next to the new, discounted price. This way, the old price acts as an anchor that makes the new price more appealing.
  • Price perception manipulation — Car dealerships often place their most expensive cars at the front of their display rooms. Once you’ve walked past them, the cars in the back don’t seem all that expensive.
  • Purchase quantity limits — Stores sometimes use signs like “Limit: 12 per customer.” The number 12 then acts as an anchor that makes customers buy more than they intended.

Everyday Anchors

Anchoring doesn’t just occur in purchasing decisions. There are many examples of anchoring in everyday life, such as:

  • Teacher’s judgments — In some schools, children are tracked and categorized by ability from an early age. Those categories then become anchors that shape the teacher’s expectations in the children. 
  • Longevity assumptions — If your parents lived to be very old, you’ll likely expect to live a long life, too. But if your parents died young, you’ll probably be surprised if you live for a long time.
  • First impressions — When you meet someone for the first time, that encounter becomes a reference point for all future interactions. It’s unfortunate and unfair, but first impression matter A LOT.

Counteract the Anchoring Bias

As you can see, the anchoring bias has a huge impact on our lives.

So, as you draw conclusions, form judgments, and make decisions, keep this sneaky tendency in mind.

Ask yourself if you are giving adequate consideration to all the information available, or if you’re giving unduly weight to some prior reference point.

That way, you’ll avoid getting stuck to irrelevant and irrational anchors.

This article is an excerpt from my book The Decision-Making Blueprint.


  1. Anchoring bias in decision-making