Anchoring

1. Behavioural skills - cognitive bias.

The anchoring effect, or anchoring bias, is a tendency in decision-making to place excessive importance on the first piece of information accessed.

This initial piece of information is known as the anchor.

A common example is the first figure mentioned in a price negotiation.

The reasonableness, or acceptability, of subsequent figures tends - wrongly - to be evaluated by reference to the earlier figure, rather than by objective criteria.

2. Financial modelling - spreadsheets - construction - cell references.

In financial modelling with spreadsheets, anchoring refers to cell references when they're copied around the spreadsheet.

Fully anchored cell references - for example $A$1 in Excel - will stay as $A$1 wherever we copy them within the spreadsheet.

This kind of cell reference is sometimes known as an absolute, fixed or dollarised reference.

Contrasted with a standard relative cell reference - for example A1.

Relative cell references are the default.

See also

• Absolute
• Affinity bias
• Bandwagon bias
• Behavioural economics
• Behavioural skills
• Choice supporting bias
• Cognitive bias
• Confirmation bias
• Default
• Default bias
• Diversity
• Dunning-Kruger effect
• Emotional intelligence
• Excel
• Executive coaching
• Financial modelling
• Hindsight bias
• Impostor syndrome
• Maslow's hammer
• Objectivity
• Optimism bias
• Reactance bias
• Relative
• Self-investment bias
• Self-serving bias
• Social bias
• Source bias
• Spreadsheet
• Status quo bias
• Working effectively with others