The Psychology of First Impressions: How Initial Information Shapes Our Reality

Anchoring bias might be the hidden force keeping you stuck in patterns that no longer serve you. This week, I dive deep into this fascinating psychological concept that shapes how we make decisions, form relationships, and even view ourselves.

Drawing from my current struggles as a new bagel shop owner facing a slow month, I explore how our minds become fixated on first impressions and initial information. When business was booming in those first weeks, that became my reference point—my anchor—making normal seasonal slowdowns feel like failures. Sound familiar? This same phenomenon affects everything from how we shop (those "original prices" that make discounts seem amazing) to how we negotiate salaries and even how we view our own capabilities.

Nobel Prize-winning psychologist Daniel Kahneman demonstrated this bias brilliantly: people exposed to completely random high numbers subsequently gave higher estimates when asked unrelated questions. Our brains crave reference points, even absurd ones. I share a personal story about being told I "couldn't draw" by a teacher years ago, and how that single comment became an automatic response whenever anyone asked about my artistic abilities—a perfect example of how these anchors subtly program our self-perception.

The good news? Once you recognize these mental anchors, you can loosen their grip. I offer practical strategies for identifying limiting anchors in your life and replacing them with empowering alternatives. Whether you're running a business, building confidence, or trying to break free from old patterns, understanding anchoring bias gives you a powerful tool for reclaiming control of your decisions and perceptions.

What anchors are holding you back? Are they serving you or limiting you? Listen, reflect, and discover how to set new reference points that propel you forward rather than keep you stuck. Subscribe, share your thoughts, and join me on this journey of continuous growth and self-discovery.

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Chapters

• 0:00 Bagel Shop Struggles
• 0:55 Understanding Anchoring Bias
• 3:22 Everyday Examples of Anchoring
• 5:27 Breaking Free From Limiting Anchors
• 10:17 Final Thoughts and Episode Closing

Transcript

Speaker 1: 0:00

Hey everybody and welcome to this week's episode of the Mike Muldoon Podcast. And oh man, it's been tough. It's been a tough month, tough month, bagel shop third month in and I think it's just August. It's a slower month where we live and people travel a lot and they're on vacation. But, man, it's been. It really tests your patience. So I'm hoping things get better in September, but we're going to be fine. It's just. It's a learning thing.

Speaker 1: 0:21

You know, I've never done something like this before. You know, like I said, I'm a writer, my wife's a lawyer. Like we've never. I've never worked in a cafe, never known how to make coffee, nothing I've done. You know, I think I worked in a restaurant I mentioned once before for like a week. I was 17,. I got fired. I was never really good at serving people, so but I think you know it's funny because I'm really suffering for something called anchoring bias right now and it's basically it's a psychological phenomenon where basically the first piece of information we receive is known as the anchor and it really heavily influences our judgments and our decisions, right.

Speaker 1: 0:55

So right now, for me, you know, it doesn't make a difference if this anchor is relevant or random or even absurd, it's just once it's in your mind it kind of weighs down your thinking and frames everything that follows. So, for instance, again with my bagel shop. You know it's very easy for these anchoring biases to sort of quietly shape my fears and my decisions. You know, because if you look at like the first week of sales can become the benchmark you measure every future against. So like our first few weeks right, because we just opened, we were slamming, right, and of course, so that becomes my norm, which means when it's not that way, obviously it creates fear. Or let's just say there was a competitor down the street. We don't really have them, we're very lucky right now, but we don't have one who suddenly has lower prices. You know that would maybe doubt help, you know, make me doubt my value that I'm bringing. Or you know even reviews. You know maybe one bad review can feel louder than 20 good reviews. Supplier cost and payroll bills can stick in your mind as immovable reference points. I'll tell you right now that's one that is sticking in my mind as an immovable reference point. And these, can you know, these anchoring biases can really leave you feeling boxed in or anxious. And I mean and that's the power of the anchor, the first number, comment or impression often influences how we think and what we should be doing afterwards. And that's what power of the anchor, the very first number, comment or impression or anything often influences again how we think long after it should.

Speaker 1: 2:53

So, nobel Peace Prize winning psychologist Daniel Kahneman. He basically explained it in thinking fast and slow, fast and slow, you know. He basically says people who were asked whether Gandhi was more than 114 years old when he died will give a much higher estimate of his age at death than people who were asked whether he was older than 35, because the anchor 114 or 35 changes perspectives, even when people know it's ridiculous. Now the thing is, the concept of anchoring bias was first demonstrated in 1974. There was these researchers who spun a wheel of fortune that landed on random numbers. Now, participants were then asked whether the percentage of African nations in the UN was higher or lower than the number and finally estimate the actual percentage. Even though the number was random, it anchored people's responses. Those who saw 10 gave much lower estimates than those who saw 65. So you see what I mean. The anchoring by it gives you a reference point of what you're basically working off of. So since then this research has really shown that anchors shape our outcomes in everything from courtroom sentences like judges gave harsher punishments when exposed to higher suggested numbers to house valuations, right, remember a couple of years ago with COVID everything was insanely busy when I bought my house. Insanely crazy Salary negotiations, even medical decisions. The thing is, an anchoring bias shows up in our everyday lives. Shopping, right. Retailers set high original prices so the discounted price feels like a steal. Right. You walk in and, oh, normally $39.99, but today for $9.99, like, oh my God, well, it was $39.99. It was probably really just $9.99. They just jacked it up on you Again. Salary negotiations right. The first number put on the table becomes the reference point. This is our starting point, right.

Speaker 1: 4:43

In relationships, a first impression, whether positive or negative, anchors how we see somebody long after right. So, again, that doesn't necessarily mean that that person is who we think they are, but it's how we're going to see them. Until that anchor changes. Even self-perception, early grades, job titles or labels such as he's shy, he's gifted, he's strange, he's awkward, whatever it is, can anchor how we view our own abilities, shaping what we think is possible. Which, if you go back and you read my book, five Basic Keys to Living Successfully in Between, which, if you go back and you read my book Five Basic Keys to Living Successfully in Between, it's really important to understand that how people are labeling you does not necessarily make that who you are, and that can change you.

Speaker 1: 5:25

Now there's upsides and downsides to anchors. Like most mental shortcuts, anchoring bias it basically cuts both ways. One of the upsides is efficiency. Right, anchors can help us decide quickly in a complex world. A motivation, a positive anchor, like a teacher calling you gifted, can set a standard that you strive to live up to. But there's also a downside manipulation. Right, marketers and salespeople use anchors to control perception of value, like we just talked about in the store. Right, oh, originally $49.99 or $39.99, only $9.99. You know they can also create a distorted sense of reality.

Speaker 1: 5:59

Anchors can trap us into narrow thinking. Again. That's something I have to try to avoid. Right now, as I'm going through this business, I'm feeling like oh my God, it's ever going to be this. This is always going to cost me this. This is what it's going to be, because I'm anchored to one thing but I'm not. Leadership material can stop you from pursuing growth or pursuing new opportunities or new jobs.

Speaker 1: 6:20

So the thing is, what we really want to do is we need to loosen these anchors. They work for us sometimes and sometimes they don't right. We can't escape anchoring bias completely. It's hardwired into how we think, but we can spot it and we can adjust it. So what I would always say just pause before deciding and ask am I reacting to the first number or an impression I saw? You know, are there multiple anchors? Right? Compare across before deciding. You know, maybe you're not. Maybe you know you're shopping for people. Do something with vehicles, right? What actually is the price of that? Right? They usually look at several different vehicles, the same vehicle, to kind of see what is, to kind of get to work off of that, instead of just being told, no, this is it. The other thing is try to flip that perspective. If someone else sets that anchor, set your own, for instance, by being the first to propose a new number in negotiation. Somebody hits you lower, maybe you hit them higher. You set. The thing is. But the thing is anchors, they aren't just obstacles for us, they can be tools. If you're somebody who works with people, like I've done in the past, it can help people identify anchors that are shaping their lives and their beliefs and help them create new ones that serve them better Again.

Speaker 1: 7:27

One of the things I often talk about is I hate when I see parents or somebody looking at a young kid and saying, oh, you're so stupid or you're so this, you're so that you are creating an anchor there. You don't realize it. That parent does not realize you think your child is a problem. Now Wait till they're 18 and 19 years old and they're really giving you problems and you didn't realize it was your fault. You called them stupid, you called them an idiot. You told them they're never going to amount to anything and they anchored to that and that's what they lived off of. So if you're somebody right now who might be struggling with certain things in your life, go back and see hey, who set that, who programmed your self-conscious with this BS anchor in your life, and then let's work to fix that, reframe these limiting anchors Again. Some of us are still anchored to old feedback. I'm bad at math. I'll never be good in public speaking. I'm not leadership material.

Speaker 1: 8:14

I talked about this on one of my earlier podcasts a few years back I had an art teacher. I swear to you, tell me one time I had a dropper art class because I couldn't draw, and for years my automatic response was when people said can you draw? No, I can't draw. And it was only a few years ago that I realized. That's why she said to me you can't draw. And anytime it was an automatic response I cannot draw. The truth of the matter is I'm not very good at drawing, but I wouldn't say I can't draw. I do have some employees who are really impressive with their drawing, but I was crazy when that dawned on me. It was an automatic response.

Speaker 1: 8:53

So again, you might have some anchoring biases that were just pressed upon you by other people and they don't have to be the way. Okay, they don't have to be the way. So if you need to change something like that, just think of a moment that proves the opposite of your limiting belief. That time you did public speak. That time you did step up. That time you did ask for something that becomes your new anchor, and that's how quickly it can change. You know, again, in my I talk a lot about this, but use these positive anchors.

Speaker 1: 9:19

Anchors aren't only numbers, they're also experiences. Recall a moment that you nailed a presentation or overcame a setback and ground your incompetence before your next challenge and also create that new anchor. Look, the thing is, anchors will always be part of how our mind works. It needs something, it needs to create and it needs to set something. It just the bind is a computer and it needs an answer, but the key is recognizing when they're steering us in the wrong direction Again, for, as a business owner right now, I felt it myself.

Speaker 1: 9:45

I talk about this. Whether it's sales numbers, whether it's reviews, it's supply costs, it's easy to get stuck comparing everything to that first figure or impression. But the same is true in our personal lives. The good news, the awareness we can loosen up the grip of those anchors and even replace them with ones that empower us and improve our lives. So for me, whether it's running a shop, or for you or somebody out there, maybe building confidence or stepping into leadership, the anchors you choose to hold onto can be the difference between feeling stuck and moving forward.

Speaker 1: 10:17

And that's what I got for you today. Make sure you're paying attention. What are you anchored to? Is it serving you or is it not serving you? And then how do we rip it out of the ground, find a new one and move on? All right, ladies and gentlemen, that's all I have for you today. Thank you so much again for tuning in for me. Thank you so much for tuning in for me. No, thank you so much for just tuning in. Please continue to share your likes and your feedback. If you're on Apple Spotify, wherever you're listening, please give me Reviews always help in the Apple world, I guess, and again, I hope you get something from this. Sorry, sometimes I'm missing because again running this new shop, but uh, we are getting there. So thank you so much for being with me. It is a friday. I'm doing this very early morning in the basement of my shop right now where I've set up, and uh, you know, it's going into the weekend. Be safe, be smart and, as always, I got another below for you. We'll see you next time.