This refers to expectations about the future value of an economic variable based on its most recent value. For instance, while trying to determine the price that customers would be willing to pay for their goods, businessmen rely mostly on data about the price that customers were willing to pay in the recent past. Data on actual sales in the past is also often used by businesses to forecast likely demand in the future. Such expectations based on historical data, while mostly accurate, can mislead people when there are unforeseen changes in the value of economic variables.