I am interested in getting better at negotiation. I have read lots on the subject, but I have realised that I was not very careful about what I read, and what evidence the authors had for their advice. I have stumbled on a useful heuristic to find better writing.
The conventional wisdom in negotiating says you should try very hard to not be the first person to mention a price.
I can see that, if you’re the seller, it may make sense to try to convince the buyer that they want the product before you start the price negotiation.
When it comes to the price negotiation though, I am not confident about the conventional wisdom.
Given what we know about anchoring, it seems more likely that the first person to say a figure will tend to anchor the negotiation to that figure, and this will influence the negotiation towards that figure.
I hadn’t read anything discussing this until I thought of it myself. But searching for ‘anchoring’ as well as ‘negotiation’ qives plenty of links to negotiation advice that looks much more evidence-based than what I’d read before: example. Checking for ‘anchoring’ in the index would probably work as a filtering technique for books on the subject, but I have not tested this.
“Different cars have different prices. I have seen ones worth $ 100 000, but I guess this one really isn’t one of them. How much would you give for this car?”
I’ve used anchoring successfully when negotiating a TV price at a large electronic retailer. I used the price of a cheaper TV with less features as an anchor. YMMV.
I am interested in getting better at negotiation. I have read lots on the subject, but I have realised that I was not very careful about what I read, and what evidence the authors had for their advice. I have stumbled on a useful heuristic to find better writing.
The conventional wisdom in negotiating says you should try very hard to not be the first person to mention a price.
I can see that, if you’re the seller, it may make sense to try to convince the buyer that they want the product before you start the price negotiation.
When it comes to the price negotiation though, I am not confident about the conventional wisdom.
Given what we know about anchoring, it seems more likely that the first person to say a figure will tend to anchor the negotiation to that figure, and this will influence the negotiation towards that figure.
I hadn’t read anything discussing this until I thought of it myself. But searching for ‘anchoring’ as well as ‘negotiation’ qives plenty of links to negotiation advice that looks much more evidence-based than what I’d read before: example. Checking for ‘anchoring’ in the index would probably work as a filtering technique for books on the subject, but I have not tested this.
You could anchor without giving your price first.
“Different cars have different prices. I have seen ones worth $ 100 000, but I guess this one really isn’t one of them. How much would you give for this car?”
I’ve used anchoring successfully when negotiating a TV price at a large electronic retailer. I used the price of a cheaper TV with less features as an anchor. YMMV.