Verbull Word of the day
Finance glossary

Anchoring Bias

Behavioral Finance · intermediate
Definition

Relying too heavily on the first piece of information seen.

Anchoring is the tendency to fixate on an initial reference point, like a stock past high, and judge later information relative to it. Investors may refuse to sell below their purchase price, anchoring to a number the market no longer cares about.

In a sentence

Anchoring bias kept her from selling below the price she originally paid, long after the story had changed.

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