Malia F Mason

Opening negotiation offers usually anchor the discussion and shape settlement values.
Many people make opening offers in “round” numbers like USD$10 instead of “precise” numbers like USD$9.
This strategy rendered less effective results in negotiation experiments, reported Columbia’s Malia Mason, Alice J. Lee, Elizabeth A. Wiley, and Daniel Ames.

Y Charles Zhang

Negotiators can improve negotiation outcomes by specifying offers in precise values because they more potently anchor the negotiation range.
In addition, negotiators who proposed precise offers were perceived as more confident, credible, and “well-informed” regarding actual value.

Norbert Schwartz

In a study of consumer confidence in various offer types,  University of Michigan’s Y. Charles Zhang and Norbert Schwarz of University of Southern California reported that some recipients of precise offers viewed these proposals as “inflexible.“

However, recipients of precise offers made more conciliatory counter-offers with smaller adjustments and more favorable final settlements.
Precise offers were associated with more favourable final deals even when the negotiator opened with a less ambitious precise offer.

Martin Schweinsberg

Precise offers are less likely to be seen as “aggressive” by a co-negotiator, according to INSEAD’s Martin Schweinsberg collaborating with Gillian Ku and Madan M. Pillutla of London Business School’s and Cynthia S. Wang of Oklahoma State University.
This enables negotiators to present ambitious first offers while avoiding “offending” a negotiation partner and stalling progress toward settlement.

Gillian Ku

This risk of stalemated negotiation increases if negotiators see themselves in a lower-power position and receive an extreme offer.
These negotiators may be more willing to end negotiations,

Manoj Thomas

Precise offers can obscure their actual value, noted Cornell’s Manoj Thomas and Vrinda Kadiyali with Daniel H. Simon of Indiana University.
Buyers underestimated the size of precise prices, particularly under uncertain conditions:  U.S. homebuyers paid more when list prices were precise.

Vrinda Kadiyali

Precise offers provide some of the benefits of favorably anchoring negotiation discussions while reducing risks of “offensive” extreme offers.

-*How effective have you found “precise” opening offers in achieving your negotiation goals?

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©Kathryn Welds