Mental Systems, Business Strategy and Anchoring effect

Abstract

Anchoring effect is one of the most famous part of Heuristics, which basically refers to the estimation of an unknown quantity will be closer to the value that have already been considered. This decision-making method is impacted by the two systems described in Thinking Fast and Slow. The system 1 is automatic, unconscious, and quickly while the system 2 need concentrations, complex operations and related to make decisions. With the combination of these two systems, anchoring effect influences the decisions invisibly, and even has a further effect on the finance and economy.