Anchoring is a cognitive bias that occurs when individuals rely too heavily on the first piece of information they encounter when making decisions. This initial information, known as the "anchor," can significantly influence subsequent judgments and choices, even if it is irrelevant or misleading. For example, if a person sees a car priced at $30,000, they may perceive a $25,000 car as a good deal, even if the actual market value is much lower. This bias can affect various aspects of life, including negotiations, pricing, and assessments of value. In business, for instance, the initial price set for a product can shape consumer perceptions and willingness to pay. Understanding anchoring can help individuals make more informed decisions by encouraging them to consider a broader range of information rather than relying solely on the first impression.