anchorbias

Anchorbias is a cognitive bias that occurs when people rely too heavily on an initial piece of information, known as the "anchor," when making decisions. This bias can significantly influence judgments and choices, often leading to suboptimal outcomes. The term was popularized by Amos Tversky and Daniel Kahneman in their 1974 paper, "Judgment Under Uncertainty: Heuristics and Biases."

The anchor effect is most pronounced when the initial information is extreme or highly visible. For example, if a person is asked to estimate the percentage of African countries in the United Nations, they might be more likely to guess a higher number if they were previously told that 10% of the countries are African, compared to if they were told that 33% are African. This is because the initial piece of information serves as a reference point, or "anchor," around which subsequent judgments are made.

Anchorbias can be observed in various contexts, including negotiations, where initial offers can significantly influence the final agreement, and in financial decisions, where the initial price of a stock can affect subsequent trading decisions. Understanding anchorbias is crucial for individuals and organizations to make more informed and unbiased decisions. By being aware of this cognitive bias, people can strive to gather a broader range of information and consider alternative perspectives before making judgments.