Anchoring bias vs conservatism bias

CFA Level III Portfolio Management
#1

Hi,

I am still confused between conservatism biases and anchoring biases. Someone please clarifyc

Thanks,

Regards,

Jahid.

#2

Conservatism bias is linked to trying to relieve cognitive dissonance (stress from brain having to work out why a base assumption changed). I like to think of it as being lazy. You keep your old beliefs and don’t update your views based on new information. You might say like some Conservative politicians.

Anchoring bias is similar but is more of a mental trick and often is referenced when talking about a short term notion like guessing someones age or asking for a higher salary. You tend to stay near the original guess because that seems safer

#3

To elaborate on burberryjam, Anchoring typically involves a number, like a stock price while Conservatism is anchoring to a belief