Definition: Our tendency to allow a number or other piece of data to serve as a starting point to determine another number.
Example: Studies have shown that the first asked price, or even an irrelevant number mentioned in a conversation like a social security number, can influence the final number in a decision.
Why It’s Important: Anchoring shows that numbers mentioned at the beginning of a negotiation have much a very powerful influence on the outcome. You can use anchoring to your benefit when negotiating. Understanding the power of anchoring can help you avoid its detrimental effects.« Back to Glossary Index