A car salesman holding an anchor while speaking to a buyer, illustrating the concept of anchoring in sales negotiations

Anchoring and Adjustment: A Powerful Cognitive Bias in Finance and Business

Introduction to Anchoring and Adjustment Anchoring and adjustment is a powerful cognitive bias that significantly impacts decision-making in various domains, including finance, business, and economics. This heuristic refers to the phenomenon where individuals base their decisions on an initial value or target number, called an anchor, and subsequently adjust their

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