What is anchoring bias and can you give me an example?

What is anchoring bias and can you give me an example?

Anchoring bias is a cognitive bias where individuals rely too heavily on the first piece of information they encounter. For example, if you see a shirt that costs $100 and then see another one for $50, you might perceive the second shirt as a great deal, even if it's not.

How does anchoring bias affect decision-making?

Anchoring bias can lead to poor decision-making because it skews our perception of value and options. For instance, if a person is negotiating a salary and the first number mentioned is high, they may anchor their expectations around that number, even if it's unrealistic.

Can you provide another real-life example of anchoring bias?

Sure! In real estate, if a house is listed at $500,000, potential buyers might anchor their expectations around that price, even if the house is worth less. This can influence their offers and perceptions of value.

What can be done to minimize anchoring bias?

To minimize anchoring bias, it's helpful to seek out multiple sources of information, consider alternative perspectives, and consciously challenge initial impressions before making decisions.