An investor, David, is considering purchasing a rental property. The real estate agent initially listed the property at $750,000. Although market comparables suggest the property is worth closer to $680,000, David offers $700,000, feeling he's getting a 'good deal' off the original asking price. Which behavioural bias is most evident in David's decision-making?

Question: An investor, David, is considering purchasing a rental property. The real estate agent initially listed the property at $750,000. Although market comparables suggest the property is worth closer to $680,000, David offers $700,000, feeling he's getting a 'good deal' off the original asking price. Which behavioural bias is most evident in David's decision-making?

Answer options: ✅ Anchoring

• Framing Effect
• Overconfidence
• Availability Heuristic

Correct answer: Anchoring

Explanation: Anchoring is the tendency to rely too heavily on the first piece of information offered (the 'anchor') when making decisions. David is anchored by the initial asking price of $750,000, making him perceive a $700,000 offer as a good deal, even if it's above the property's true market value.