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Anchoring Bias

People rely heavily on the first piece of information (the “anchor”), even if it’s irrelevant.

Anchoring Bias

During an online shopping spree, Priya was browsing for a new laptop. She had been eyeing a high-end model for weeks, knowing it was pricey but worth the investment for her work. As she scrolled, her eyes landed on a flashy deal—an “Exclusive Offer” for a model she had considered, priced at Rs. 80,000, marked down from Rs. 1,10,000.

Excited about the apparent discount, Priya immediately began comparing it to the laptops she had already seen, feeling this was a rare opportunity to save. The Rs. 80,000 price tag felt like a good deal, even though it was still above her initial budget. Priya convinced herself that the discount justified the splurge—after all, she was saving Rs. 30,000. The deal seemed too good to pass up, and within minutes, she clicked the “Buy Now” button.

However, the moment Priya received the laptop and started using it, she couldn’t help but notice that the features weren’t as exceptional as she had hoped. In fact, she realized she had overpaid compared to other laptops in the market with similar specs, which were priced around Rs. 70,000.

This is an example of anchoring bias. The initial price of Rs. 1,10,000 anchored Priya’s perception of the laptop’s value, making the Rs. 80,000 price seem like an excellent deal. Even though other options were more cost-effective, the first piece of information—the original high price—skewed her judgment and led her to make an overvalued purchase. The bias of relying on that first impression distorted her decision-making.

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Scarcity Bias

Tendency to value limited or scarce resources more highly than those that are abundantly available.

Small Win Bias – Gratification Bias

Tendency to prioritizes or value short-term rewards over long-term benefits.

The Cheating Bias

Dishonest behavior by getting influenced to do so when observing others, leading to unethical practices.

Sisyphus Effect

Tendency to give up when there is no gratification or visible meaning / output to efforts.

The IKEA Effect

People tend to value an object more if they contribute to its creation.

Dunning Kruger Effect

Overestimating one’s knowledge due to a lack of understanding about the complexity of a subject.

Decoy Option Effect

Influences preferences by introducing a less attractive intermediate option, subtly steering choices towards more profitable alternatives.

Confirmation Bias

The tendency to search for, interpret, favor and recall information in a way that confirms or supports one’s prior beliefs or values.

Spotlight Effect

The tendency to believe that we are being noticed more than we really are.

Current Mood Bias

It is a distortion in cognition and decision making due to the present emotional state.

Prestige Bias

The tendency to favor the opinions of individuals or groups with higher social status or authority even when not in the same field.

Social Desirability Bias

Tendency to respond to or behave in a way that is socially acceptable or desirable, rather than expressing their true opinions or behaviors.

Recency Bias

The tendency to better recall recent information and events while ignoring older information.

Restraint Bias

The tendency to overestimate the level of control we have over our impulsive behaviors.

Survivorship Bias

The tendency to focus on the individuals or things that have “survived” or succeeded, while overlooking data from those that have not.

Response Bias

Tendency to provide inaccurate or false answers during surveys or interviews.

First impression Bias

The tendency to form lasting opinions based on initial experiences.

Omission Bias

Tendency to avoid taking action due to fear or uncertainty, even when not taking action could be more harmful.

Bundling Bias

The tendency of buying things that are sold together, even if we don’t need everything in the bundle. Think of this as the “package deal effect.”

Distinction Bias

In decision making, we tend to overvalue the minor differences between two almost similar options when we examine them together.

Projection Bias

Individuals overestimate the prevalence of their own thoughts, beliefs, preferences, and knowledge in others.

Salience Bias

Our tendency to focus on items or information that are more noteworthy while ignoring those that do not grab our attention.

Diversification Bias

Spreading our resources thinly across numerous options instead of concentrating on a few.

Pessimism Bias

A tendency to believe things will go wrong even when there is no evidence to support it.

Optimism Bias

Tendency to overestimate the likelihood of positive outcomes and underestimate the negative ones.

Bandwagon Effect

It refers to our habit of adopting certain behaviors or beliefs because many other people do the same.

Framing Bias

Equivalent information can be more or less attractive depending on how it is presented, influencing our decisions.

Recall Bias

Individuals do not accurately remember past events or experiences or leave out details while reporting about them.

Group Think Bias

A group of individuals reaches a consensus without critical reasoning or evaluation of the consequences or alternatives, simply doing or agreeing because everyone else is.