Final answer:
Anchoring bias refers to our tendency to rely on initial values, prices, or quantities when estimating the actual value, price, or quantity of something. It occurs when we fixate on a single trait of a problem or focus on one piece of information when making a decision or solving a problem.
Step-by-step explanation:
Anchoring bias refers to our tendency to rely on initial values, prices, or quantities when estimating the actual value, price, or quantity of something. It occurs when we fixate on a single trait of a problem or focus on one piece of information when making a decision or solving a problem. For example, if you are presented with a quantity, even if that number is arbitrary, you may have a hard time discounting it in your subsequent calculations because the initial value 'anchors' your estimates.
The anchoring bias can influence statistical reasoning and lead to irrational judgments. Tversky and Kahneman conducted an experiment where subjects were asked to estimate the number of African nations in the United Nations. The experimenters provided an initial random anchoring value, and subjects found it difficult to deviate far from that number in their estimates. This demonstrates how the way a question is phrased can determine the end result, which is characteristic of anchoring bias.