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Anchoring and Adjustment Bias

October 23, 2017

An information-processing bias in which the use of a psychological heuristic influences the way people estimate probabilities. When required to estimate a value with unknown magnitude, people generally begin by envisioning some initial default number, an “anchor” which they can adjust up or down.

Regardless of how the initial anchor was chosen, people tend to adjust their anchors insufficiently and produce end approximations that are, consequently, biased.

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From → Economics

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