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 its actual value is much lower. This phenomenon is commonly observed in various contexts, including negotiations and marketing. In negotiations, the first offer often sets the tone for the discussion, while in advertising, initial prices can create a perception of value. Understanding anchoring can help individuals make more informed decisions by recognizing the influence of initial information.