3.4.1—Cognitive biases

A cognitive bias is a systematic tendency in attention, memory or judgment that can move decisions away from a relevant standard. Anchoring bias pulls an estimate toward an initial value; confirmation bias favours information that supports an existing belief or hypothesis.

An anchor can set a starting point from which adjustment is insufficient, even when the number is arbitrary. Confirmation bias can shape which evidence is sought, interpreted and remembered, creating a self-reinforcing decision. Both can be efficient shortcuts in some settings rather than universal irrationality.

A first price of $900 can make$650 seem cheap even when market evidence suggests $500. A buyer who then searches only for positive reviews may combine anchoring with confirmation bias. Using independent benchmarks and deliberately testing disconfirming evidence targets the two mechanisms differently.

A poor decision is not automatically biased, and changing one's mind is not proof that bias disappeared. Identify the initial anchor or prior belief, the information-processing route and the comparison needed to show a systematic effect.