Why the opening bid hijacks everything that follows—and why arbitrary numbers have real power

You’re negotiating a salary. The recruiter asks what you’re looking for. You hesitate, then say $80,000.

Now everything that follows is a negotiation around $80,000. Eighty becomes the center of gravity. If they offer $75,000, you feel like you lost. If they offer $85,000, you feel like you won.

But what if you’d said $100,000? Then $90,000 would feel like a concession on your part. The same $90,000 that felt like a huge win in the first scenario now feels like a loss.

The final number didn’t change. But the anchor did.

The Shortcut

When your brain encounters uncertainty—“how much is this worth?” “how likely is that?”—it looks for reference points. Starting places. Anchors.

Then it adjusts from the anchor. But here’s the thing: it doesn’t adjust enough. It stays too close to wherever it started.

This is called anchoring and adjustment, and it’s one of the most robust findings in decision-making research. Give people an anchor—any anchor—and their estimates will cluster around it. Even if the anchor is arbitrary. Even if they know it’s arbitrary.

In one famous study, researchers spun a wheel of fortune (rigged to land on either 10 or 65) in front of participants, then asked them to estimate the percentage of African countries in the United Nations.

The wheel had nothing to do with African countries. Everyone knew the wheel was random. But people who saw the wheel land on 65 gave estimates averaging 45%. People who saw it land on 10 gave estimates averaging 25%.

A random number from a rigged game shifted their answers by 20 percentage points.

Why It Works (In Nature)

In most situations, available reference points actually are informative.

If you’re estimating how far away a waterhole is, and someone who just returned says “about a day’s walk,” that’s genuinely useful information. You should anchor on it and adjust from there.

If you’re estimating what a fair trade looks like, and you’ve seen similar trades happen, those precedents provide valid anchors.

In the ancestral environment, anchors were usually relevant. They came from experience, from local knowledge, from people with information. Anchoring on available reference points and adjusting was a good strategy because the available reference points were usually meaningful.

The shortcut assumes anchors are informative. The shortcut trusts that the number you’re given has something to do with the question you’re answering.

What Changed

Now you’re surrounded by anchors that are strategically planted, arbitrarily generated, or completely irrelevant.

Retail pricing: “Originally $200, now $79!” The $200 is the anchor. It might have never sold for $200. But now $79 feels like a deal.

Negotiations: The first number on the table becomes the anchor. Whoever sets it gains advantage—not because they’re right, but because everyone will adjust insufficiently from their starting point.

Asking for donations: “Would you like to donate $100, $50, or $25?” The $100 anchor makes $50 feel reasonable. If they’d asked “Would you like to donate $25, $10, or $5?” the same $50 would feel extravagant.

Sentencing recommendations: When prosecutors suggest sentences, judges anchor on those numbers even when they claim to be making independent assessments.

Salary negotiations: Posting salary ranges anchors the entire negotiation. If the range is $80-100K, candidates anchor on that range and rarely ask for $130K, even if they’re worth it.

The anchors aren’t informative anymore. They’re strategic. But your brain treats them the same way—as useful reference points to adjust from.

The Mechanism

Here’s what’s happening computationally:

Estimation under uncertainty is hard. Your brain takes shortcuts. One shortcut is to start from an available number and move from there.

The problem is in the “move from there” step. Adjustment is effortful. It requires actively generating reasons to move away from the anchor. Each reason moves you a little further. But you stop adjusting when you run out of reasons, when the cognitive effort exceeds the perceived benefit, or when the new number “feels about right.”

“Feels about right” is doing a lot of work here. What feels right is heavily influenced by the anchor. You’re adjusting until you reach a number that feels reasonable, but your sense of “reasonable” has already been contaminated by the starting point.

So you stop too early. The anchor retains influence. A higher starting point yields a higher final estimate. A lower starting point yields a lower one.

This happens even when you’re warned about it. Even when you’re trying to compensate. The adjustment is never sufficient.

Where This Costs You

Buying houses. The listing price is an anchor. If a house is listed at $500,000, your negotiation orbits that number. You might offer $470,000 and feel like you’re lowballing. But if the house is worth $400,000, you’ve just anchored yourself into overpaying by tens of thousands.

Selling your time. Your current salary anchors your expectations. If you’re at $60,000, a jump to $80,000 feels huge. But if you’re underpaid and your market rate is $100,000, you’ve anchored yourself into leaving money on the table.

Evaluating deals. Any time someone gives you a “before” price, you’re being anchored. “50% off” means nothing without knowing what 100% should be. But your brain treats the original price as meaningful.

Planning timelines. The first estimate you hear for how long something will take becomes the anchor. Subsequent estimates feel like they should be “adjustments” from that baseline. If the first estimate was wrong, all subsequent thinking is contaminated.

Legal settlements. The opening demand in a lawsuit anchors the negotiation. Defendants often settle for more than they would have if the opening demand had been lower, even when they know the demand is inflated.

The Uncomfortable Truth

You can’t turn off anchoring. It operates below conscious access. Even experts who study anchoring are subject to it. Knowing about the bias provides surprisingly little protection against it.

What you can do:

Generate your own anchor first. Before hearing anyone else’s number, estimate independently. Write it down. This gives you a reference point that isn’t contaminated by strategic anchors.

Consider the anchor’s source. Is this number informative, or was it planted? List prices, opening offers, and “original” prices are almost always strategic. Treat them as adversarial information.

Adjust more than feels right. Since you know you’ll underadjust, deliberately push further from the anchor than feels comfortable. If your gut says $75,000, try $85,000. You’re probably still not moving far enough.

Change the frame. Instead of adjusting from their number, reframe entirely. “I’m not sure that list price reflects market reality. Let me walk you through my independent valuation.” This lets you introduce your own anchor.

The first number wins. Not because it’s right. Not because it’s relevant. But because your brain can’t help treating it as a starting point.

Whoever sets the anchor shapes the outcome. Make sure it’s you.

This is Part 4 of Your Brain’s Cheat Codes, a series on the mental shortcuts that mostly work—and the specific situations where they’ll ruin you.

Previous: Part 3: The Dead Don’t Write Memoirs

Next: Part 5: Losing Hurts Twice As Much — Loss Aversion