Wi-Ai and Anchoring Bias

Wi-Ai and Anchoring Bias

Wi-Ai and Anchoring Bias 2000 1333 Wi-Ai.net

“But you told me…!”

Four little words which make investment professionals groan inwardly.

“Yes,” we think to ourselves, taking a deep, yogic breath. “We did say that. We also told you six other things and said it’d probably change over time!”

I’m playing this up for dramatic effect, of course, but the struggle, as they say, is real – and can often be down to anchoring bias.

Anchoring bias occurs when people rely too much on the first piece of information they find.

For example, let’s say we’re in a restaurant (remember those?) and we’re looking at the wine list. A clever restauranteur may place an exorbitantly priced wine first, which will naturally be met with a wince from us customers. However, if the next wines on the list are less expensive, we’re likely to breathe a sigh of relief and view these as cheap, even if – and this is key – they’re actually still quite pricey. The price of the first wine is our “anchor”, and it unduly influences our opinion.

Anchoring bias affects everyone and everything, including your clients and the way they approach their investment decisions.

Want to understand how Wi-Ai can help you and your customers reveal and take ownership of behavioural bias? Get in touch at [email protected]

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