Decisions about the degree to which costs must be cut are often made using the anchoring and adjustment heuristic.

Question

Quizplus · Accepted Answer

The anchoring and adjustment heuristic is a cognitive bias in decision making where individuals rely too heavily on the first piece of information (the anchor) when making subsequent judgments or decisions. This can lead to decisions about cutting costs being anchored to a certain initial amount and then adjusted from there, even if it may not be the most rational decision. Therefore, the statement is true.

Decisions About the Degree to Which Costs Must Be Cut