First impression bias1/9/2024 ![]() Once it drops anchor, it shapes how you perceive the value and features of a product or service. However, the information you receive and process (the “anchor”) is incomplete. ![]() The brainchild of psychologists Daniel Kahneman and Amos Tversky, the anchoring effect is a cognitive bias that explains why people make some purchasing decisions based on price, quality and other basic details. What is the anchoring effect and how does it influence what you buy? The “anchoring” or “focalism” effect is one such cognitive bias. Cognitive biases that inform your perception about a product or service without you knowing it can play a role in how you spend your money. How many times have you gone to buy a birthday present and been taken in by the first thing you hear about a product? You probably buy products or pay for services often to satisfy a need. It’s not easy to avoid, but you can learn to recognize it and make sure it doesn’t hurt your finances. It affects your decision-making about food, clothes and other things to buy. ![]() The anchoring effect is a financial bias you see every day.
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