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Dora is expecting to give raises to her employees based on what they made last year. She has changed their job requirements and does not look at what the market pays for these types of jobs. Dora is making her decision on their initial salary and is experiencing _____. representativeness bias information bias overconfidence bias anchoring and adjustment bias hindsight bias

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Answer: Anchoring and Adjustment bias

Explanation:

ANCHORING AND ADJUSTMENT bias refers to a situation where individuals base their decisions on one point and make changes driven by that point.

This point is the starting point and is usually known as an ANCHOR and is adjusted until an acceptable value is reached which is rarely the case and is especially a problem when the anchor is quite different from the true answer.

In this scenario, the Anchor is the original salary and Dora is making adjustments on only one point being her employees' earnings in the previous year when she needs to look at more factors such as market compensation value for the new roles she has assigned.

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