AP PSYCHOLOGY

Detailed explanation-1: -An anchoring bias is a faulty heuristic which occurs when you focus on one piece of information when making a decision or solving a problem. People make inaccurate final estimates due to inaccurate adjustments from an initial value.

Detailed explanation-2: -For example, used car salesmen often use ‘anchors’ to start negotiations. So rather than ask for $3, 000 for the car, they ask for $5, 000. That way, when he cuts the price of the car, it seems like we are getting a better deal. The $5, 000 is the anchor.

Detailed explanation-3: -Heuristics are mental shortcuts that allow people to solve problems and make judgments quickly and efficiently. These rule-of-thumb strategies shorten decision-making time and allow people to function without constantly stopping to think about their next course of action.

Detailed explanation-4: -The anchoring effect is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments.