Intermediate Microeconomic Theory
The anchoring and adjustment heuristic is a cognitive bias where individuals rely too heavily on an initial piece of information, known as the 'anchor,' when making decisions. This initial anchor affects their subsequent judgments and estimates, often leading to biased outcomes. This heuristic highlights how people simplify complex decision-making processes by starting with an anchor and then adjusting from that point, though the adjustments may not be sufficient.
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