Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/256781 
Year of Publication: 
2022
Series/Report no.: 
Discussion Paper No. 314
Publisher: 
Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition, München und Berlin
Abstract: 
Anchoring is a robust behavioral phenomenon modeled predominantly as a bias in individual judgment. We propose a game-theoretic model that considers players' beliefs about others' behavior as a mediator for the effect of the anchor on a player's choice. The results establish that anchoring in strategic interactions reported in the literature can be rationalized by anchored beliefs about the opponents' intentions. Notwithstanding, we also demonstrate that a player might adjust away from rather than toward the anchor in games where choices are strategic substitutes.
Subjects: 
Anchoring Bias
Auctions
Games
Incomplete Information
Strategy
JEL: 
D01
D91
C72
Document Type: 
Working Paper

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