Use mental anchors to determine the start position of high-stakes discussions

The next time you find yourself in a tricky situation, try to influence the discussion by anchoring at another reference point.

Time-dependent algorithms usually have one major issue. The starting value heavily decides the outcome. The same applies to your mind’s thinking process.

This concept is also called anchoring

Anchoring the perception

If you enter a bazaar and the seller starts with a price, he has anchored the price discussion on a specific value. The standard advice is to make a counteroffer with an equally offending low price.

Kahneman suggests that the best approach is not to start with an opposing low number. The contrast principle will lead to a higher price on your part, as the seller has anchored the price. Even if you know the contrast principle as a sales strategy, you will bear the psychological load: you will experience your position as unjustified and amorally.

Resist anchoring by breaking the pattern

Instead, Kahnemann suggests that you should abort any interaction. Make a scene and storm out. You will emotionally brand the initial offer as outlandishly high and attach a negative emotion to it.

When you come back to the store, the emotional charge is on the seller to offer a lower price.