The Anchoring Effect is a cognitive bias that describes the human tendency to rely too heavily on the first piece of information encountered (the 'anchor') when making decisions.
At its core, the anchoring effect is a psychological heuristic that influences the way we interpret presented information. For example, if we are told to guess a person's weight after being told their height, we will predict the weight based on the anchor (height). The same principle applies to a wide range of situations such as negotiations, where the first price offered often serves as an imaginary anchor against which resulting offers are judged. It's a bias that occurs subconsciously, showing how our perceptions and decisions are influenced by contextual factors.
We have an irrational bias toward the first information we hear, see, or experience. This first piece of information is the anchor for everything that follows. - Charlie Munger
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