Difference bw Anchoring and Adjustment and Conservatism
Anchoring and Adjustment – is sticking to original forecast – gtg attached to it. O/wtg old info and U/wtg new info and its an Information Processing Bias.
In a case in exam, will a certain number be given to distinguish bw the two biases. ‘Impact’ example would be: believing current mkt downfall will continue
Conservatism – Maintaining prior views by failing to incorporate new info. Its a Belief Perseverance Bias.
Unconsciously O/wtg original forecasts and U/wtg new info – ‘Impact’ example: holding on too long to an investment that has poor outlook (isnt this the same as Anchoring ??)