Anchoring

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Anchoring

The act of basing an investment decision on irrelevant information. For example, if one bases the value of a stock on its price a year ago, one is practicing anchoring. This can be a dangerous practice, but it is also easy to do. Anchoring is a concept in behavioral economics, which states that people often make decisions based on their perceptions and feelings in addition to (and sometimes instead of) facts.
References in periodicals archive ?
74) These opinions dispute the empirical significance of the Guidelines' anchoring effect, arguing that in the career offender context the offender's prior crimes independently explain why he or she received a higher sentence.
Jodi Beggs tackles the topic of behavioral economics, using various episodes to demonstrate time inconsistency, narrow bracketing, reference-dependent utility, and the anchoring effect.
I find that it enhances it, suggesting the presence of a positive learning effect which dominates any potential anchoring effect.
As Kahneman's experiment demonstrated, the anchoring effect occurs even when the anchor is completely irrelevant to the decision at hand.
If this is the case, then social norm intervention programs might not be effectively assessing the success of their campaigns; the education that students are receiving from social norm interventions may merely be affecting their estimates of alcohol consumption through an anchoring effect rather than changing actual behavior.
We find a very large anchoring effect in the students' long-term stock return expectations, that is, their estimates are influenced by an initial starting value.
As a result, inaccurate figures can take on a life of their own, gaining momentum through what academics call "the anchoring effect.
In the case of punitive damage awards, PIJ views the strong relation between punitive and compensatory damages as a troublesome anchoring effect that ought to be reduced.
but PVC extrudates show very small retraction, due probably to the anchoring effect of crystallites, similar to other cases observed in the literature (32).
In ground that was always going to have an anchoring effect, Glamis was ridden off the pace and given too much to do as Fantastic Light and Dehoush battled it out up front.
Utilizing the same bioabsorbable polymer as in BrachySciences' portfolio of strand products, AnchorSeed's unique proprietary design offers a true anchoring effect to help significantly reduce seed misalignment and seed migration.