ECONOMICS

Detailed explanation-1: -Gandhi and the Anchoring Effect (Strack and Mussweiler, 1997) This study shows that numbers that are impossibly linked to the target question can still have an effect. Their aim was to see how the anchoring effect could influence guesses of Mahatma Gandhi age when he died.

Detailed explanation-2: -Anchoring bias occurs when people rely too much on pre-existing information or the first information they find when making decisions. For example, if you first see a T-shirt that costs $1, 200 – then see a second one that costs $100 – you’re prone to see the second shirt as cheap.

Detailed explanation-3: -This phenomenon is known as anchoring. Anchoring is one of the cognitive biases discovered by Tversky and Kahneman (1974).

Detailed explanation-4: -Anchoring bias describes people’s tendency to rely too heavily on the first piece of information they receive on a topic. Regardless of the accuracy of that information, people use it as a reference point, or anchor, to make subsequent judgments.

Detailed explanation-5: -For example, many people have a political view that they start with as their ‘anchor’. They may think that a politician is a terrible person. So, all future articles they read will be clouded by this anchoring point.