Anchoring bias

Anchoring bias,

Definition of Anchoring bias:

  1. The act of basing a judgment on a familiar reference point that is incomplete or irrelevant to the problem that is being solved. An example is when a consumer judges the relative value of a product or service from a company on the basis of the cost in some previous period of time. Or, an investor may judge that a stock price is overvalued or undervalued based on that stocks previous high share price.

Meaning of Anchoring bias & Anchoring bias Definition