What is anchoring bias and how does it affect decision-making?

What is anchoring bias and how does it affect decision-making?

Anchoring bias is a cognitive bias where individuals rely too heavily on the first piece of information they encounter. This initial 'anchor' can significantly influence subsequent judgments and decisions.

Can you give me an example of anchoring bias in real life?

Sure! For instance, if a car is initially priced at $30,000 and then marked down to $25,000, buyers may perceive it as a great deal, even if the car's actual value is much lower.

How can I avoid falling victim to anchoring bias?

To avoid anchoring bias, try to gather multiple sources of information before making a decision. Consider the context and question the initial data you receive.

Are there any fields where anchoring bias is particularly impactful?

Yes, anchoring bias is especially impactful in fields like marketing, finance, and negotiations, where initial offers or prices can skew perceptions.