Anchoring Bias and the Price You Didn’t See
“The first offer is the most extreme anchor imaginable.”
How One Number Quietly Rewrites Your Sense of Value
You open a restaurant menu and notice a steak priced at $99. You’re not going to order it. You probably weren’t planning to order steak at all, but when your eyes drift down and land on the $49 ribeye, it suddenly feels…reasonable? It may even feel like a deal.
Nothing has changed except your point of reference. That’s called anchoring. It’s one of the most quietly powerful cognitive biases in human decision-making, and it’s everywhere.
What Is Anchoring Bias?
Anchoring bias is the tendency to rely too heavily on the first piece of information offered, the “anchor,” when making decisions. Once an anchor is set, it becomes a reference point. Even if it’s arbitrary or irrelevant, your brain compares every subsequent piece of information to it.
This effect was first formalized by psychologists Amos Tversky and Daniel Kahneman in the 1970s. In one study, they spun a wheel rigged to land on either 10 or 65, then asked participants whether the percentage of African countries in the UN was higher or lower than that number. Afterward, participants were asked to estimate the actual percentage. Those who saw the number 65 gave significantly higher estimates than those who saw 10, despite the number having no actual relationship to the question.
In other words, the anchor distorted their judgment.
We don’t escape this bias just because we’re smarter or more experienced. In fact, anchors can be even more powerful when we believe we’re thinking rationally. The brain isn’t evaluating value in a vacuum. It’s adjusting from whatever it saw first, and marketers are aware of this.
Anchors in the Wild
Anchoring is baked into the pricing strategies of almost every industry. Once your eyes are open to it, you see it everywhere.
In Never Split the Difference, former FBI hostage negotiator Chris Voss explains that anchoring isn’t just a business tactic—it’s a psychological principle that applies even in life-or-death hostage negotiations.
“The first offer is the most extreme anchor imaginable, and psychologically, it draws the other party into the conversation on your terms” (Voss & Raz, 2016, p. 121).
Whether it’s a ransom demand or a software subscription, the first number sets the frame for what follows. It doesn’t just suggest value, it establishes a new reality.
Luxury Menus and Decoy Steaks
Restaurants often place one or two high-priced items at the top of the menu, not to sell them, but to make the rest look more affordable. That $99 porterhouse doesn’t need to sell. It just needs to make the $49 ribeye feel like a sane choice in comparison.
Retail Discounts That Aren’t
When an ecommerce site shows a product originally priced at $120, now “on sale” for $69, it’s creating a value comparison. The product may have never truly been worth $120, but the number anchors your expectation. You feel like you’re getting a bargain, even if you aren’t.
Tech Pricing Tiers
Software-as-a-service companies often present three pricing tiers: Basic, Pro, and Enterprise. The top tier is intentionally high—sometimes comically so—not to be chosen, but to make the middle tier feel reasonable. That $499/month “Enterprise” package makes the $149/month “Pro” look just right.
Real Estate Listings
When real estate agents show you a home well outside your budget at the start of your search, they’re not being careless. They’re anchoring. Once you've seen the $1.4 million house with the waterfall kitchen island, the $900,000 home down the street seems modest.
Apple’s Product Pages
Apple is a master of anchoring. Visit any product page, and you’ll see the most expensive option first. Want a MacBook Pro? The first configuration listed is often $2,499. You may end up with the $1,699 model, but that option now feels restrained, even frugal.
These are not coincidences. Pricing strategies are designed this way.
Why Anchoring Works So Well
Anchoring works because the brain tends to seek shortcuts. We don’t evaluate prices, values, or even risks in isolation. We compare them to something, often the first thing we see.
This is particularly powerful in moments of uncertainty. When you don’t know what something should cost, your mind grabs onto any available number and adjusts from there. That adjustment rarely goes far enough. The anchor exerts a gravitational pull, warping your perception of value.
What’s more, anchoring doesn’t just affect pricing. It influences our perceptions of time, status, quality, and risk. If your first job out of college paid $40,000, a $60,000 offer feels generous. If your first job paid $85,000, the same number feels disappointing. Same offer. Different anchor.
In marketing, this means that the order and context in which options are presented often matter more than the options themselves.
The Ethics of Anchoring
Anchoring isn’t inherently manipulative. Framing is a natural part of communication. Every choice we present to someone involves context, and that context shapes perception. There’s nothing wrong with showing the full range of what you offer, or with helping people understand where your product fits within a broader market. Still, anchoring can cross a line into unethical territory.
If a price is inflated solely to manipulate the perception of a “deal,” or if the anchor is intentionally false, such as fake MSRP values or time-limited sales that never actually expire, then the tactic becomes dishonest. Moreover, consumers are growing more aware of this. There’s a fine line between persuasive design and a breach of trust. Marketers who rely too heavily on artificial anchors risk damaging their credibility in the long term.
Good marketing builds understanding. It helps people make decisions they feel good about, both in the moment and after the fact.
Anchoring, when used ethically, can clarify value. It can help guide people toward appropriate choices by offering useful comparison points. When used deceptively, it exploits a flaw in human cognition for short-term gain.
How to Spot (and Use) Anchors Wisely
If you’re a consumer, becoming aware of anchoring is the first step toward resisting its pull. When you see a high price listed first, pause and ask yourself: What is this being compared to? Is that first number relevant or real?
Look for patterns. Do the “original prices” seem inflated? Are the most expensive items designed to be purchased, or to influence your perception of everything else?
When possible, do your own research. Find multiple reference points. Remove yourself from the source of the anchor by switching platforms, seeking third-party input, or taking a break from the decision.
If you’re a marketer or business owner, consider how you’re presenting your offerings. Are you helping people understand their options, or are you manipulating their perception?
Here are a few questions worth asking:
Would the middle-tier product still feel valuable without the premium decoy?
Are your sale prices based on real historical pricing or inflated comparisons?
Do your customers feel more informed and empowered after interacting with your pricing structure?
Anchoring is powerful. When it’s used transparently, it can support better decisions and clearer communication. On the other hand, when it’s hidden or dishonest, it undermines trust.
Closing Thoughts: Choose Your Anchors, Don’t Let Them Choose You
Every decision we make is influenced by something. Anchors are unavoidable, but they don’t have to be invisible. The more you understand them, the more you can step back from your knee-jerk reaction and ask, “Is this truly a good deal or does it just feel like one?”
Marketers who understand the concept of anchoring have an edge, but the best marketers use it to clarify, not to confuse. Ultimately, perception is power, but awareness is freedom.