Abstract
In behavioral economics, scholars have found that both biases and heuristics affect people's individual or group behavior, and the heuristics also referred to as the shortcuts. Based on this, this article will research and discuss the anchoring effect and its impacts in economically relevant decision making. In addition, the article will explain a few applications in terms of several conditions under which anchoring is generated. It is the numerical priming paradigm, the "comparison-judgment" start paradigm, and the subthreshold priming paradigm. To be specific, the anchoring impact on peoples economics outcomes and individual behavior through the three different mechanisms in stock market, asking price in the real property negotiation, a classical experiment about estimating temperature by using association and hint and so on. In this report, it is going to go through these three mechanisms and focusing on the applications and practical significance of them. They reveal that when people make decisions under various uncertain conditions, the decision makers will approximate the estimated results to the anchor value, resulting in estimation bias.
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