Legal Definitions - anchoring

In negotiations, "anchoring" means giving too much importance to the first value or number presented and not adjusting it enough. This is called the "anchoring bias" and is often used as a negotiating strategy. By setting a "anchor," negotiators can frame the negotiation to their advantage.

Person A wants a salary of $80,000. In the negotiation, Person B offers $30,000 as the initial salary. Due to the anchor, Person A may counter with $55,000, which is still far less than what they originally hoped for.

The anchoring effect can also be used in the courtroom on juries and judges.

In a trial, the prosecution may present a high number for damages, which becomes the anchor. The defense may then have a harder time presenting a lower number, even if it is more reasonable.

These examples illustrate how anchoring can influence negotiations and decision-making, leading to potentially unfair outcomes.