Economics Anchoring Questions
There are two main cognitive biases associated with anchoring:
1. Anchoring and adjustment bias: This bias occurs when individuals rely too heavily on the initial piece of information they receive (the anchor) when making decisions or judgments. They then adjust their subsequent judgments or decisions based on this initial anchor, even if it is irrelevant or arbitrary. This bias can lead to inaccurate or biased decision-making.
2. Confirmation bias: This bias refers to the tendency of individuals to seek out and interpret information in a way that confirms their pre-existing beliefs or expectations. In the context of anchoring, individuals may selectively search for or interpret information that supports the initial anchor, while ignoring or downplaying information that contradicts it. This bias can reinforce and perpetuate the effects of anchoring, leading to biased decision-making.