Asked by
Thomas Smith
on Nov 25, 2024
Verified
Suppose Ryan and Rita were randomly shown the numbers 25 and 67, respectively, and then asked to estimate the price of an item about which they have relatively limited knowledge. According to findings from behavioral economics, we would expect
A) Ryan to estimate a price higher than what Rita would estimate.
B) Ryan to estimate a price lower than what Rita would estimate.
C) Ryan to estimate a price about the same as what Rita would estimate.
D) the randomly shown numbers to have no influence on their estimates.
Anchoring Effect
A cognitive bias in decision-making where individuals rely too heavily on the first piece of information (the "anchor") offered when making decisions.
Behavioral Economics
A field of economics that studies the effects of psychological, social, cognitive, and emotional factors on economic decisions.
- Recognize various cognitive biases and their impact on decision-making, including status quo bias, framing effect, and anchoring effect.
Verified Answer
CC
Learning Objectives
- Recognize various cognitive biases and their impact on decision-making, including status quo bias, framing effect, and anchoring effect.