What does the anchoring effect in cognitive bias involve?

The anchoring effect in cognitive bias refers to the tendency of individuals to rely too heavily on the first piece of information they encounter when making decisions, which is often referred to as the "anchor." When people are presented with initial suggestions or data points, these tend to shape their perceptions and influence subsequent judgments.

For instance, if a person is presented with a high initial price for a product, they may perceive subsequent lower prices as bargains, even if those prices are still high relative to the market. This initial reference point can skew their decision-making process, leading them to prioritize the first suggestion over other relevant information or options available to them.

In contrast, the other choices address different cognitive biases or decision-making processes. Focusing on the most recent information relates more to recency bias, making decisions based solely on averages pertains to a simplistic approach to data that may not consider variability, and forgoing all past suggestions does not align with the concept of anchoring, which inherently involves using previous information as a starting point for comparison.