People hold on to this information, called an anchor, as a reference point and fail to correctly adjust their initial impressions, even after receiving additional information. Other types of cognitive bias in decision-makingĪnchoring bias (also known as anchoring heuristic or anchoring effect) is a type of cognitive bias that causes people to favor information they received early in the decision-making process.By showing you all the expensive cars first, the dealer has set an anchor, influencing your perception of the value of a used car. Having seen all the expensive options, you think these cars seem like a good bargain. Next, the car dealer walks you toward the back of the lot, where you see more affordable cars. The dealer walks you around, showing you all the higher-priced cars, and you start worrying that you can’t afford a car after all. Example: Anchoring bias You are considering buying a used car, and you visit a car dealership. Because of this, anchoring bias can lead to poor decisions in various contexts, such as salary negotiations, medical diagnoses, and purchases. Regardless of the accuracy of that information, people use it as a reference point, or anchor, to make subsequent judgments. Try for free What Is Anchoring Bias? | Definition & ExamplesĪnchoring bias describes people’s tendency to rely too heavily on the first piece of information they receive on a topic. Eliminate grammar errors and improve your writing with our free AI-powered grammar checker.
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