When to Make the First Offer in Negotiations

http://hbswk.hbs.edu/archive/4302.html

by kristiandupont • 16 years ago

74 8 16 years ago

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patio11• 16 years ago

It is not obvious to me than anchoring matters nearly as much in situations where the party being anchored knows they are in a negotiation.

(Couldn't you defeat it by, I don't know, pulling out a piece of paper and writing a number on it beforehand? Granted, that would be an improvement over the truly atrocious negotiations I've seen and been party to... I mean, if you are hearing the first whisper of your market value during salary negotiations, something is seriously borked with your decisionmaking processes.)

cperciva• 16 years ago

It is not obvious to me than anchoring matters nearly as much in situations where the party being anchored knows they are in a negotiation.

On the other hand, an anchor can backfire when the party being anchored doesn't know they're negotiating, too.

When Google offered me a job back in 2006, they named the first number -- and coming from an academic background and having no experience in industry, it didn't occur to me to try to negotiate. Instead, the low offer simply contributed to me rejecting the offer.

It's entirely possible that I would be working for Google if they had offered me what they thought I was worth. (I don't know what they thought I was worth, but in hindsight and with the benefit of talking to many Googlers in similar positions, I'm sure it would have been at least 25% and probably 50% higher.)

donaldc• 16 years ago

One of the points of the article was that, no, even in situations where a party objectively knows that the number given should not have any effect, it does anyway.

Human psychology often doesn't make rational sense.

furyg3• 16 years ago

For a really good primer in basic negotiations, take a look at Fisher & Ury's Getting to Yes (http://www.amazon.com/Getting-Yes-Negotiating-Agreement-With...).

It's a quick read but very useful, and these guys are respected in the field of negotiation.

joshkaufman• 16 years ago

Bargaining For Advantage by G. Richard Shell (http://www.amazon.com/dp/0143036971/) and 3D Negotiation by David Lax and James Sebenius (http://www.amazon.com/dp/1591397995/) are even better than Getting to Yes, IMO.

schwit• 16 years ago

Why do you think products have an MSRP? It's a number that has no bearing on the true value of a product.

itblarg• 16 years ago

Similarly, every nice restaurant will have a $60 steak entree on the menu to make the $29 chicken entree appear more affordable.

lionhearted• 16 years ago

I think the "Don't offer first" advice from before it was so easy to do research. Anecdotally, most of the people I know who are good at negotiating are comfortable offering first, and seem to do so more than half the time.

When to Make the First Offer in Negotiations

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