Saturday, March 6, 2021

Anchoring Heuristics

 The anchor point or anchoring heuristic is a heuristic often used when you have very limited information when you are making the decision. You mind uses what information it has as a basis for making the decision. For example, when looking up at the sky on a dark starry night, you are asked if you can see more or less than 100,000 stars. Then your are asked how many stars you are looking at.  Since you have already been given an anchor point of 100,000, you generally will base your estimate off that number and guess, 1,000,000 or even 100,000,000 but likely far less than the actual number of close to 2 trillion.

Similarly this helps explain the current demand  for Pokemon. People hear of a single Pokemon card selling for $480,00. Since they know little else about Pokemon, that becomes the anchor on which they base their estimation of how much other Pokemon cards are worth. If they get more information about the value of other Pokemon cards, their brain incorporates that into its store of knowledge about Pokemon and uses it for future decisions.

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