Abstract
The purpose of this study is to determine the role of anchoring bias in the economic and financial information. An experiment involving the business students is carried out by providing them information about recent economic and financial anchors about stock market, index returns, inflation and exchange rates in groups where one groups is exposed to some relevant anchors. In the first group, which is the “control group” the participants were given no relevant information and were asked to give their best estimate for all the respective indicators. In the second group the “anchoring group” participants were asked the same questions but are provided indicator anchors to deduce their anchoring estimates, for instance the current value of KSE-100 index is provided, and the respondents were asked to predict the current value of KSE-30 index. The results show that there is significant degree of anchoring bias for each of the questions and it is higher for males as compare to females. Similarly, the respondents when exposed to relevant anchors show significant anchoring bias than for irrelevant anchors. Keywords: Anchoring Bias, Relevant Anchoring, Irrelevant Anchoring, Perceived Relevance, Financial Indicators.
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