Precise Offers Are Potent Anchors: Conciliatory Counteroffers and Attributions of Knowledge in Negotiations
Coauthor(s): Malia Mason, Alice J. Lee, Elizabeth A. Wiley.
People habitually use round prices as first offers in negotiations. We test whether the specificity with which a
first offer is expressed has appreciable effects on first-offer recipients' perceptions and strategic choices.
Studies 1a–d establish that first-offer recipients make greater counteroffer adjustments to round versus precise
offers. Study 2 demonstrates this phenomenon in an interactive, strategic exchange. Study 3 shows that
negotiators who make precise first offers are assumed to be more informed than negotiators who make
round first offers and that this perception partially mediates the effect of first-offer precision on recipient adjustments.
First-offer recipients appear to make assumptions about their counterpart's language choices and
infer meanings that are not explicitly conveyed. Precise numerical expressions imply a greater level of knowledge
than round expressions and are therefore assumed by recipients to be more informative of the true
value of the good being negotiated.
Source: Journal of Experimental Social Psychology
Mason, Malia, Alice J. Lee, Elizabeth A. Wiley, and Daniel Ames. "Precise Offers Are Potent Anchors: Conciliatory Counteroffers and Attributions of Knowledge in Negotiations." Journal of Experimental Social Psychology (forthcoming).