The Anchoring Effect

The tendency to "anchor" (rely too heavily) on one piece of information when making a decision. 

During normal decision-making, we often anchor, or overly rely, on specific information at the expense of other important information. We narrow our sights. Usually, once the anchor is set, there is a bias toward that information. Take, for example, my mom while shopping for a boat. She focused excessively on the pretty blue curtains of an older Chris-Craft and didn't think about how well the engine worked. She paid $30,000 for the vessel which sat in a slip for a year while a mechanic fiddled with the engine. A year later, she dumped the boat (because it needed a new engine) and muttered something like, "Boats are holes in the water where you throw money...and the happiest day of a boat owner's life is the day they buy the boat and the day they sell it." This bias is also known as "The Focusing Effect."