Anchoring
The first number you hear pulls every number after it, so write your own before you hear theirs.
- thinking-traps
- autopilot
- hermes
Rohan is looking for a second-hand scooter in Lucknow. The first seller he visits says ₹60,000. Rohan thinks that is too much, bargains hard, and gets it down to ₹52,000. He walks away feeling he did well.
A week later a friend tells him a similar scooter in the same area sold for about ₹45,000. Rohan did bargain. But he bargained downward from a number someone else chose.
That is anchoring. The first number you hear becomes the point your mind measures everything else from, even when the number is random or comes from someone who wants to sell. Daniel Kahneman and Amos Tversky studied it in the 1970s.
The decision, worked through
Rohan does not need to become a sharper bargainer. He needs his own number before he hears theirs.
Before the next visit, he looks at three listings for the same model and age, and asks a mechanic what a scooter in that condition is worth. Then he writes one line in his notes: "My range is ₹43,000 to ₹47,000. Above ₹48,000, I leave."
At the next shop the seller opens with ₹58,000. The number still pulls at him, because anchors do that. But his own range is already written down, so he can say "that is far from what I have seen" and start from his number, not theirs. He may still buy that scooter. The difference is that the price now has to meet his range, instead of his range drifting toward the price.
Where it goes wrong
An anchor is not always a price someone says aloud. It can be a crossed-out "was ₹4,999, now ₹2,999" on a tag, a salary figure the recruiter mentions first, or the budget a relative suggests for a wedding.
There is a second trap. If your range comes from a single listing, you have only swapped one anchor for another. Take three sources, and write down where each number came from.
Also, knowing about anchoring does not switch it off. The pull stays. That is why the number goes on paper before the conversation, not during it.
One thing to try today
Think of one price, offer or budget you have to respond to this week. Before you look at the asking number again, write your own range and the two or three places it came from. Then compare the two. The first time will feel slow, and a little odd.
This is a way to think, not financial, medical or legal advice.
Each Sunday: one mental model and one real decision to try it on. Browse the model library.
What it is
The first number you hear becomes the starting point.
- The anchor
- A number you hear first, even a random one or one from someone who wants to sell.
- The pull
- You bargain, compare and judge from the anchor, not from your own sense of value.
Everything after it is measured from there.
When to reach for it
When someone says a number before you have one.
- Buying second-hand or bargaining
- A scooter, a flat, a phone from a seller.
- A salary or fee
- The recruiter or client names a figure first.
- A crossed-out price
- The 'was' price on a tag is an anchor too.
An everyday example
A second-hand scooter in Lucknow.
- The first number
- Rohan bargains down to 52,000 and feels he did well.
- The better move
- He checks three listings, asks a mechanic and writes a range and a walk-away number.
- What changes
- At the next shop the opening price still pulls, but the price has to meet his range, not the other way round.
The seller says 60,000.
What is my range, before I hear theirs?
The trap
Knowing about it does not switch it off.
- One source
- A range built from a single listing is just another anchor. Use three and note where each came from.
- Anchors you do not hear aloud
- A recruiter's figure, a relative's wedding budget, a tag with a crossed-out price.
Try this today
One price or offer, and a pen.
- Write your number first
- Write your own range and its sources before you look at the asking number again.
What would I say this is worth, and where did I get that?