Question

Suppose Chelsea reads two news articles about future house prices. The first article predicts that house prices will fall next month, and the second predicts that house prices will rise next month. Valerie reads the same two articles, but she first reads the one that predicts that house prices will rise, and then reads the one that predicts that house prices will fall. If Chelsea and Valerie know very little about future house prices, and each uses anchoring and adjustment to form her assessment, then, all else equal, which of them is more likely to think that house prices will rise next month?

Multiple Choice

• Chelsea

• Valerie

• They are both equally likely to think that house prices will rise

• They will both think that house prices will stay the same

Answer 1

All else equal ,Valerie is more likely to think that house prices will rise next month because she firstly reads the article which says that price will rise next month. Hence,option(B) is correct.