What is the anchoring and adjustment heuristic?

The anchoring and adjustment heuristic refers to a cognitive bias in which individuals rely heavily on the first piece of information they encounter (the "anchor") when making decisions. This initial information sets a cognitive baseline, and subsequent adjustments made during the decision-making process are often insufficient or disproportionate.

For example, if a person is given an initial price for a car, that price serves as the anchor when they evaluate the value of the car. Even when new information is presented, such as a better price or features of a competing car, the individual’s judgment may still be heavily influenced by that initial price.

In decision-making contexts, this heuristic illustrates how the first impression can shape perceptions and choices, often leading to biased outcomes. This is why the first option is the correct response to the question about the anchoring and adjustment heuristic. Other choices describe different conceptual frameworks and do not accurately encapsulate the essence of anchoring and adjustment, which centers specifically on the impact of initial information on decision-making processes.