Anchoring in a negotiation involves "naming your price" or fixing your negotiating position through declaration of goals that may or may not be readily apparent to your counterpart. Anchoring has the effect of shifting the negotiation away from a collaborative process to one of haggling.
The following items are tagged anchoring in negotiation:
Consider this anchoring bias example from Harvard Business School and Harvard Law School faculty member Guhan Subramanian. While running a negotiation simulation in one of his classes, Subramanian noticed that one student spent a considerable amount of time explaining why $10.69 per hour would be an impossible wage rate to offer the student’s counterpart. The … Read More
The first offer dilemma in negotiations – should you make the first offer? Few questions related to negotiation techniques and negotiation strategies have yielded more academic attention and debate among practitioners in negotiation research.
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Opening offers have a strong effect in price negotiations. The first offer typically serves as an anchor that strongly influences the discussion that follows. In research documenting price anchoring, psychologists Daniel Kahneman and Amos Tversky found that even random numbers can have a dramatic impact on people’s subsequent judgments and decisions.
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Should you make the first offer in a negotiation? Typically yes, abundant research on the anchoring bias suggests. What is anchoring in negotiation? In negotiations centered on price or another figure, the party who moves first typically benefits by “anchoring” the discussion that follows on her offer—even if the anchor is arbitrary. For example, the … Read More
It may be the most burning question in business negotiation: Should you make the first offer?
Traditionally, negotiators were advised to wait for the other side to make a first offer. According to this reasoning, the other side’s offer gives you valuable information about his goals and alternatives.
More recently, however, research on the anchoring bias has … Read More