In this video, you will learn about the concept of anchoring bias and how you can avoid falling for it. #anchoringbias #cognitivebias #wallstreetmojo #decisionmaking #financialmarket Chapters: 00:00 – Introduction 00:24 – What is anchoring bias? 01:36 – Examples in finance 02:41 – How to avoid it? What is anchoring bias? It is known as anchoring bias when a person is given a piece of information and solely relies on it whenever they take any decision. Amos Tversky and Daniel Kahneman first introduced the theory of anchoring bias in their book Judgment under Uncertainty: Heuristics and Biases. (Explained in detail in the video) Examples in finance A trader or an investor may only look at the current price movement and base their decision around it. But they need to look at the complete picture before they act, or they may fall for the anchoring bias and incur losses. (Explained in detail …
