Learn how to negotiate like a diplomat, think on your feet like an improv performer, and master job offer negotiation like a professional athlete when you download a copy of our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School.


anchoring

An attempt to establish an initial position around which negotiators will make adjustments. (Richard Luecke, Harvard Business Essentials: Negotiation [Harvard Business Press, 2003], 49)

The following items are tagged anchoring:

Solar Power

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Georg Berkel Two-party, one-issue distributive negotiation about the acquisition of a renewable energy firm … Read More 

Consultant, The

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Two-party, multi-issue negotiation in which the parties are at an apparent impasse: the most one party can pay is substantially less than the least the other party can accept. … Read More 

How to Use MESOs in Business Negotiations

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It’s not uncommon in business negotiations to find yourself on the brink of impasse. You and your counterpart have exchanged a series of offers and counteroffers, and you’ve met somewhere close to the middle—but not close enough. With each side firmly rooted in its position, there may seem to be no way forward. … Read More 

Negotiating Rationally

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On the basis of their studies of the negotiation behavior of more than 10,000 executives and students over the past five years, Bazerman and Neale conclude that most managers tend to behave irrationally in negotiations. In this book they explore many of the common mistakes that negotiators often make, explaining how such irrational errors can … Read More 

Super Slipster

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Matt Smith under the supervision of Robert C. Bordone, with revisions by Michael Moffitt Two-party personal injury settlement negotiation between the attorney for the injured plaintiff and general counsel for the defendant toy manufacturing company … Read More 

Sally Soprano II

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Wayne Davis, Mark N. Gordon and Bruce Patton Two-party integrative negotiation between agents for an opera singer and an opera house regarding a possible contract for an upcoming production, under conditions of full disclosure. … Read More 

Rosenberg v. Lincoln Landscaping

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Pat Aaron Three-person small claims mediation between a landscaping company and its client over a disputed bill and quality of service … Read More 

10 Popular Business Negotiation Articles

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Here are ten popular business negotiation articles on the Program on Negotiation website. Drawn from a variety of negotiation case studies as well as negotiation research, the following articles offer strategies for engaging in integrative negotiations aimed at creating win-win scenarios for each party at the negotiation table. 1. What is the Right of First Refusal? Rights … Read More 

Ocean Splash

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The Consensus Building Institute, Inc. Two-party, two-issue scoreable negotiation between a charity and a corporate sponsor regarding the number and placement of advertising banners at a fundraising walk … Read More 

Negotiated Development in Redstone

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Lawrence Susskind and John Forester Two-party, two-issue scoreable negotiation between a developer and a neighborhood association representative regarding the development terms of a new condominium project … Read More 

Power in Negotiation: The Impact on Negotiators and the Negotiation Process

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According to Dacher Keltner of the University of California at Berkeley and his colleagues, power in negotiation affects two primary neurological regulators of behavior: the behavioral approach system and the behavioral inhibition system. Powerful negotiators demonstrate “approach related” behaviors such as expressing positive moods and searching for rewards in their environment. … Read More 

National Energy Policy Simulation

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Eric Jay Dolin, Daniel Greenberg and Lawrence Susskind Highly complex multi-party, multi-issue negotiation among political, industry, environmental, and consumer leaders and lobbyists to develop a detailed proposal to reduce U.S. vulnerability to changes in energy prices and supply … Read More 

Law Library, The

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John Palenberg, Elizabeth Gray, Deborah Winter, and Wayne Davis Two-party negotiation between representatives of two law firms over the sale of a collection of law books … Read More 

Integrative Negotiation Examples: Making Wise Bets on the Future in Bargaining Scenarios

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A town government and a private fuel-oil company have a standing contract that they have renewed for several years in a row. The contract is again up for renewal, and the town manager is under pressure from his constituents to reduce the city’s heating costs and avoid tax increases. The city’s fuel-oil consumption has remained … Read More 

Kelly Corporation, The

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Ron Karp and Bruce Patton Three-party brief negotiation among a supervisor and two employees who are each asking for a raise … Read More 

Effective Negotiation Techniques: Strive for a Precision Advantage

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As you may have noticed, the first offer made in a negotiation often has a significant influence on the final outcome. In their research, psychologists Daniel Kahneman and Amos Tversky documented that the first number introduced in a negotiation serves as an “anchor” that can be impossible to ignore—no matter how irrelevant, outrageous, or insulting … Read More 

Eazy’s Garage

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Bruce Patton (adapted by Sheila Heen) Four-party, two-stage negotiation between an auto mechanic and a client and their respective attorneys over a disputed repair bill; first stage involves lawyer-client interviews and second stage involves negotiation … Read More 

An Example of the Anchoring Effect

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People tend to irrationally fixate on the first number put forth in a negotiation—the anchor—no matter how arbitrary it may be. Even when we know the anchor has limited relevance, we fail to sufficiently adjust our judgments away from it. This is the anchoring effect. … Read More 

Development on Bay Island

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Rafael Montalvo and Bruce Stiftel Two-party distributive negotiation between a developer and a city representative over the amount of money the developer will pay the city to defray costs associated with development … Read More 

5 Good Negotiation Techniques

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You’ve mastered the basics of good negotiation techniques: you prepare thoroughly, take time to build rapport, make the first offer when you have a strong sense of the bargaining range, and search for wise tradeoffs across issues to create value. Now, it’s time to absorb five lesser-known but similarly effective negotiation topics and techniques that … Read More 

Contract Negotiations in the Building Trades

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Lawrence Susskind Nine-party, multi-issue contract negotiation among three coalitions involved in the building trades; includes internal coalition meetings before the external negotiations … Read More 

Price Anchoring 101

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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. … Read More 

Colortek Job

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Deborah Kolb Two-party, multi-issue integrative negotiation between a corporate VP and a prospective employee over salary and other terms of hire … Read More 

Case of the Puerile Printer

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Albie Davis and Ericka Gray Six-party mediation with employees, employer, and legal counsel over the contested result of a sexual harassment grievance procedure … Read More 

What is Anchoring in Negotiation?

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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 

Book Contract, The

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Two-party, single-issue distributive negotiation between a publisher and a literary agent over the advance payment for the agent’s unpublished but very promising client … Read More 

Ad Sales, Inc.

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Lawrence Susskind Six-party, multi-issue contract negotiation between management and union members of a publishing firm … Read More 

Parker-Gibson

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Two-party, single-issue distributive negotiation between two neighbors regarding the potential sale of a vacant lot; refinement of Appleton-Baker … Read More 

Anchoring for Maximum Effect

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It’s said that you never get a second chance to make a great first impression, and that certainly can be the case in negotiation. A weak handshake or a gruff demeanor can color how we see someone for a very long time. Similarly, make an unambitious or poorly worded first offer, and you’re much less … Read More 

Eazy’s Garage

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Bruce Patton Two-party negotiation between lawyers for an auto mechanic and a customer over a disputed auto repair bill … Read More 

The Anchoring Bias Can Get Talks off to a Strong Start

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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 

Bamara Border Dispute

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Michael D. Landry Two-team, multi-issue negotiation between representatives of two fictional countries regarding a disputed border and a military stand-off … Read More 

Compensation Negotiation Tips for Salary Bargaining

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Job candidates are often eager for compensation negotiation tips, and with good reason: they tend to be at a bargaining disadvantage relative to the hiring organization. Due to the well-documented anchoring effect, the first figure introduced into the discussion can strongly influence the final outcome—and the wage or wage range cited by employers is likely … Read More 

67 Fish Pond Lane

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Elizabeth Gray, Mark Gordon and Bruce Patton Two-party distributive and potentially integrative negotiation between principals over the sale of a house … Read More 

Private Negotiation, Public Auction, or Both?

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When Amazon and Apple each began scouting locations for a new campus this past year, we might have expected them to follow a similar search process. But, in many ways, their searches have been polar opposites:

Amazon set off a frenzy in September 2017 when it announced it was soliciting bids from cities interested in hosting its second … Read More 

Bentley Convertible

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Roger Fisher and Bruce Patton Two-party distributive negotiation over the sale of a rare automobile … Read More 

Sales Negotiation Techniques

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In sales negotiations, making the first offer is often a smart move. The first offer can anchor the discussion that follows and can have a powerful effect on the final outcome. But if the other party makes the first offer, you’ll need to be prepared to frame your counteroffer carefully. What is framing in negotiation? It … Read More 

For Sellers, Staying Mum on Price Can Offer Hidden Advantages

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Imagine yourself in a dilemma that only a privileged few get to experience: You’ve fallen in love with a dazzling, one-of-a-kind home that’s on the market, but it doesn’t have a listing price. Instead, the seller’s broker is encouraging you to name what you’re willing to pay. An offer well into the millions seems expected, … Read More 

Deal Design Guidelines: Set Yourself Up for a Better Deal

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Without realizing it, we leave many of our most important decisions in negotiation up to chance. When talking to a potential negotiating partner, we may assume that we have met the best person possible to do this particular deal. We make tacit assumptions about whether we’ll negotiate in person, what we’ll discuss, how long the … Read More 

Should salary negotiations be a laughing matter?

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In salary negotiations, job candidates are often at a disadvantage relative to the hiring organization. Due to the well-documented anchoring effect, the first figure introduced into the discussion tends to strongly influence the final outcome. Unfortunately for candidates, the first figure mentioned in a negotiation often is not in their favor. For example, when opening salary … Read More 

What is the Anchoring Bias?

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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 

When First Offers Fail

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In negotiation, the party who makes the first offer often gets the lion’s share of the value. That can be due to the anchoring effect, or the tendency for the first offer to “anchor” the bargaining that follows in its direction, even if the offer recipient thinks the offer is out of line. Yet plenty of … Read More 

Leadership Style Assessment: Road Map for Podemos in Spain

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The skills required for honing an effective participative leadership style have a great deal in common with those used by good negotiators. Following the May 24, 2015 municipal elections in Spain, all of those skills are being put to the test. The elections delivered a stunning rebuke to the incumbent conservative Popular Party of Mariano … Read More 

Satisficing and Negotiation

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It stands to reason that devoting less time to relatively unimportant choices should free you up for more meaningful pursuits and increase your overall satisfaction. But how does the concept of satisficing apply to your most important decisions and negotiations? … Read More 

When Forming First Offers, Take Precision into Account

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What should your first offer be in a negotiation? The question doubtless has led to sleepless nights for negotiators who understand that the first offer in a negotiation tends to have a strong anchoring effect on the haggling that may follow. Because even extreme offers can pull the discussion in their direction, the question of how … Read More 

A Negotiation Back on the Rails with Transactional Leadership

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Crumbling transportation infrastructure has become a serious issue across the country. Nowhere is this problem more acute than the nation’s capitol, where the forty year-old Metro has been plagued by ineffective, bureaucratic leadership, and is now on the verge of collapse. New Metro Chairman Jack Evans aims to tackle those problems head-on, but he drew … Read More 

Negotiation Advice: When to Make the First Offer in Negotiation

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When or when not to make the first offer in negotiations is a question many expert negotiators ask themselves when approaching business negotiations, real estate transactions, or even interpersonal negotiations with friends and family. In this article drawn from negotiation research, we offer negotiating skills and negotiation tips for when, and when not, to make … Read More 

Dear Negotiation Coach: Starting Off on the Right Foot

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QUESTION I’m trying to decide whether to make the first offer in a price negotiation. I’ve heard arguments in favor of both points of view—that is, going first versus sitting back and waiting for the other side to go first. Which tends to be the more effective strategy? ANSWER Negotiation is often a balancing act between learning about … Read More 

In Negotiation, How Much Does Personality Matter?

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We tend to have strong intuitions about which personality traits help or hurt us in negotiation, but does research on the topic confirm our hunches? Before we explore this topic, please answer “True” or “False” in response to the following questions: 1. Extroverted negotiators tend to perform better than introverted negotiators. 2. Agreeable negotiators generally are more successful … Read More 

Negotiation Research You Can Use: Make Stronger First Offers in Multi-Issue Negotiations

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Make stronger first offers in multi-issue negotiations New research suggests how to frame your opening offer for maximum advantage. Should you make the first offer in a negotiation? It’s not a trivial question. The negotiator who makes the first offer can powerfully anchor the discussion in her favor, research has found. In fact, the first offer accounts for … Read More 

Tough Negotiation Tips from Jennifer Aniston?

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Fans of the television show Friends got a treat last month when Netflix made all 236 episodes of the blockbuster hit available to stream online. At first glance actors Lisa Kudrow, Jennifer Aniston and the rest of the star-studded cast might not be your first pick to peg as formidable negotiators, but at the height … Read More 

When a little power is a dangerous thing

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In 1975, Leigh Steinberg launched his career as a sports agent with what appeared to be a tough negotiation. The Atlanta Falcons had chosen Steinberg’s client, rookie quarterback Steve Bartkowski, as their first pick in the first round of the National Football League (NFL) draft. The Falcons had other choices they could turn to if … Read More 

How Mental Shortcuts Lead to Misjudging

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Judges don’t make decisions based on a thorough accounting of all the relevant and available information. Instead, like all of us, they rely on heuristics – simple mental shortcuts – to make decisions. As many past articles have noted, heuristics often lead to good decisions, but they can also create cognitive blinders that produce systematic … Read More 

In negotiation, it’s all in the timing

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On July 11, 2000, U.S. president Bill Clinton welcomed Israeli Prime Minister Ehud Barak and Palestinian Authority Chairman Yasser Arafat to a summit at Camp David aimed at resolving the Israeli-Palestinian conflict once and for all. The summit covered various contentious issues, including territory, settlements, security, and the status of refugees. After about two weeks, on … Read More 

Knowledge of Biases as an Influencing Tool

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Past Negotiation articles have highlighted many of the cognitive biases likely to confront negotiators. Work by researchers Russell B. Korobkin of UCLA and Chris P. Guthrie of Vanderbilt University suggests how to turn knowledge of four specific biases into tools of persuasion. … Read More 

Anchor Trials or Balloons in Conflict Resolution

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The power of anchors in negotiation has been demonstrated time and again. Sellers who demand more tend to get more. Indeed, the initial asking price is usually the best predictor of the final agreement. A trio of researchers may have found an important exception to this rule, however; lower starting numbers set by the seller in … Read More 

The Enduring Power of Anchors

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In past issues of Negotiation, we’ve reviewed the anchoring effect – the tendency for negotiators to be overly influenced by the other side’s opening bid, however arbitrary. When your opponent makes an inappropriate bid on your house, you’re nonetheless likely to begin searching for data that confirms the anchor’s viability. This testing is likely to … Read More 

Conflict Management – Evenhanded Decision Making

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As discussed in past articles, anchoring and framing can bias important decisions in negotiation. A buyer may make a more generous offer than she intended, for example, after a seller drops anchor on a bold demand. A litigant who focuses on his chances of winning in court – a positive frame – may be less … Read More 

Avoid judicial bias with negotiation

Posted by & filed under Conflict Resolution, Daily.

Adapted from “Blind Justice? Think Twice Before Going to Court,” by Chris Guthrie (professor, Vanderbilt University Law School), first published in the Negotiation newsletter, April 2007. Planning to resolve a personal or business dispute in court? Consider that judges don’t make decisions based on a thorough accounting of all the relevant and available information.  Instead, like … Read More 

Anchors Away?

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Adapted from “The Enduring Power of Anchors,” first published in the Negotiation newsletter, October 2006. In the Negotiation newsletter, we have reviewed the anchoring effect—the tendency for negotiators to be overly influenced by the other side’s opening bid, however arbitrary. When your opponent makes an inappropriate bid on your house, you’re nonetheless likely to begin searching … Read More 

The Ambidextrous Negotiator

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Adapted from “Evenhanded Decision Making,” first published in the Negotiation newsletter, May 2006. As discussed in past issues of the Negotiation newsletter, anchoring and framing can bias important decisions in negotiation. A buyer may make a more generous offer than she intended, for example, after a seller drops anchor on a bold demand. A litigant who … Read More 

Advertising at a charity walk

Posted by & filed under Business Negotiations, Daily.

The PON Clearinghouse offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. Ocean Splash is a two-party, two-issue scoreable negotiation between a charity and a corporate sponsor regarding the number and placement of advertising banners at a fundraising walk. SCENARIO: The U.S. Cancer Association (USCA) chapter in Sixton City is organizing its … Read More 

Budget turmoil inside a hospital

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The PON Clearinghouse offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. Negotiating Budget Cuts at Newtowne Hospital is a six-person negotiation among hospital administration and employee representatives to reach consensus on budget cuts in three departments. SCENARIO: Dr. Van Hagen, a distinguished heart surgeon, will soon join the staff at Newtowne Hospital, … Read More 

Dropping anchors

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Adapted from “Anchors or Trial Balloons?”, first published in the Negotiation newsletter. The power of anchors in negotiation has been demonstrated time and again. Sellers who demand more tend to get more. Indeed, the initial asking price is usually the best predictor of the final agreement. A trio of researchers may have found an important exception … Read More 

Making the first move

Posted by & filed under Daily, Negotiation Skills.

Adapted from “Should You Make the First Offer?” by Adam D. Galinsky (Professor, Northwestern University). First published in Negotiation Newsletter. Whether negotiators are bidding on a firm, seeking agreement on a compensation package, or bargaining over a used car, someone has to make the first offer. Should it be you, or should you wait to … Read More