What is the effect of anchoring in decision-making processes?

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Anchoring is a cognitive bias that describes the tendency to rely heavily on the first piece of information encountered (the "anchor") when making decisions. This effect can significantly influence how subsequent information is processed and the final decision that is made.

When prior information is presented, it often sets a mental benchmark. For instance, if an individual is given an initial price for a product, further evaluations will likely be influenced by that price, even if it is arbitrary or irrelevant. This reliance can lead to skewed judgments and decisions that reflect the initial anchor rather than objective analysis of the current situation or additional information.

In contrast, the other options either misinterpret the nature of anchoring or suggest outcomes that are not characteristic of this cognitive bias. Therefore, the assertion that anchoring impacts decisions based on prior information accurately captures the essence of its effect in decision-making processes.

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