anchoring bias

anchoring bias definition - business

anchoring bias

Basing a judgment on a familiar reference point that is incomplete or irrelevant to the problem being solved. For example, a consumer judges the relative value of a product on the basis of the cost in some previous period. An investor judges a stock price as overvalued or undervalued based on the stock's previous high price.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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