The cognitive process model "SARA" aims to explain the anchoring effect and hindsight bias by making detailed assumptions about the representation and alteration of item-specific knowledge. The model assumes that all processes, namely generating an estimate, encoding new information (i.e., the "anchor"), and reconstructing a previously generated estimate, are based on a probabilistic sampling process. Sampling probes long-term memory in order to retrieve information into working memory. Retrieval depends on the associative strength between this information and the currently active retrieval cues. Encoding the anchor may alter this associative pattern ("selective activation") or the anchor may serve as a retrieval cue, thus directing memory search ("biased reconstruction"). Both processes lead to systematically changed retrieval probabilities, thus causing the anchoring effect or hindsight bias. The model is completely formalised and implemented as a computer program. A series of simulations demonstrates the power of SARA to reproduce empirical findings and to predict new ones.