The First Number Wins

Walk into a store and see a jacket marked "was $200, now $120." You feel like you are saving $80 — even if the jacket was never worth $200. The original price is an anchor, and it distorts your sense of value. Daniel Kahneman and Amos Tversky identified this effect in 1974 as one of the most powerful cognitive biases.

Anchoring works because your brain grabs the first number it sees as a reference point, then adjusts too little from it. In experiments, even random numbers nudged people's estimates of unrelated quantities. Car dealers, real estate agents, and salary negotiators use this every day — and the only defense is knowing that the first number you hear has already biased your judgment.