Definition: A type of cognitive bias -- the tendency to make decisions based heavily on the first piece of information provided.
Thought: Examples always make things easier to understand so here's one... When you buy a new phone for $500, your anchor point becomes $500. Therefore, when it comes time to buy a case for your new shiny toy, a $35 case doesn't feel like much in comparison to the anchor point. Now flip that around! If you bought the $35 case first (creating an anchor point), the $500 phone would feel like a lot more money.
What does this have to do with design? By understanding anchoring, designers are able to reset user expectations and assist in the arrangement or presentation of comparable items and information. Think about how e-commerce items are arranged on the page