Anchoring techniques

Specific Anchors Are Sometimes Good When Negotiating

One of the biggest cognitive influences on any negotiation is the anchor. Whenever you are negotiating about something like a salary, there is some starting number that gets things going. That initial number often has a significant impact on the rest of the negotiation. If the initial anchor is high, the final settlement is often higher than if the initial anchor is low. The work of Kahneman and Tversky demonstrated that people take an anchor and then adjust from it. So, if you are buying a house, the home seller sets a price that serves as an anchor. The buyer then adjusts downward and often makes an offer that is lower than the seller’s asking price. The anchor matters, though, because people often do not adjust enough. ….[READ]