Question

Juan was preparing for a meeting and was given an estimate for new construction costs of $100 million. During the meeting, when asked for the range he estimate for new construction costs, Juan was fixated on the $100 million and gave a range near $100 million. This is described as:

Answer 1

Answer:

Anchoring bias.

Explanation:

In this scenario, Juan was preparing for a meeting and was given an estimate for new construction costs of $100 million. During the meeting, when asked for the range he estimate for new construction costs, Juan was fixated on the $100 million and gave a range near $100 million. This is described as an anchoring bias.

Anchoring bias is a phenomenon which involve individuals relying too much on an initial or pre-existing information such as the first information acquired when making decisions. It is simply a cognitive bias because the first piece of information acquired or gathered by the anchor (Juan) is what is used to make subsequent judgments during decision making or to favor his decision.