anchoring bias
Anchoring bias is letting the first number you hear shape every judgement afterwards, even when that number was meaningless.
In plain English
A seller asks ₦80 million. You negotiate hard and get it to ₦68 million, and you feel you have done extremely well.
But nobody ever established that the property was worth ₦80 million. That was simply the first number spoken, and from that moment your entire sense of a good outcome was built around it. Had they opened at ₦55 million, ₦68 million would have felt like a defeat.
That is anchoring, and it is astonishingly powerful. The first number spoken shapes everything after it, even when everybody involved knows it was arbitrary.
It runs through your financial life constantly. The share you bought at ₦100 that you refuse to sell at ₦70, because ₦100 has become the anchor, even though what you paid has no bearing whatsoever on what it is worth now. The salary offer that shapes what you dare to ask for. The original price that makes a discount feel generous.
The defence is to establish your own number before you hear theirs. What is this actually worth to me, and what will I pay? Write it down before the conversation begins.
Then the first number spoken is yours, and you are the anchor.
You decide a property is worth ₦60 million to you and write it down before viewing. The agent opens at ₦85 million. Because you arrived with your own number, ₦72 million does not feel like a win. It feels like ₦12 million too much, which it is.
Questions people ask
Does anchoring affect experienced negotiators?
Yes. Studies show it works even on people who know exactly what it is and are actively trying to resist it. Preparation is the only reliable defence.
How does it affect investing?
People refuse to sell below what they paid, as though the purchase price means something to the market. It does not. Only what it is worth now matters.
Should I make the first offer?
Frequently yes, if you have done the work and know what the thing is worth. The first number spoken shapes everything after it.
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