4 ms·

It's interesting that he mentions that naming a number first in salary negotiations is to your advantage, when the usual advice is that the first person to name

It's interesting that he mentions that naming a number first in salary negotiations is to your advantage, when the usual advice is that the first person to name a number loses. If there is really no rebound effect, why don't we hear stories of people asking for outrageous amounts of money, instead of letting the hiring manager name a salary first?

zaidf 17y ago
I read on here few months ago that naming your own price first is better. Now I believe it! Recently we hired a sales person on PT basis. At the interview, she gave her expected salary to be about 2.5 times what I had thought about paying her. Now, I know about this notion of anchoring and yet I felt kind of embarrassed to make my initial offer. I fought off the urge to buy into her frame and ultimately made a decent offer but it was still significantly higher than what I had originally planned...and I credit much of it to her naming her price first! I do think there is an upper limit which if you cross, you risk getting the other party to TOTALLY ignore it as a joke. I came pretty close to doing that with our PT person.
- mcantor 17y ago
  It feels so hilariously appropriate that you were hiring a sales person, and they did a spectacular job of, as they say, "selling themselves."
  - whatusername 17y ago
    http://xkcd.com/125/ http://xkcd.com/125/ covers it nicely.
  - zaidf 17y ago
    Yes, she is good :) Her accomplishments included talking herself out of four speeding tickets and from going to jail in Columbia. We'll know soon how well she's doing that magic in selling our product!
- ciniglio 17y ago
  I agree with you that it seems like there should be an upper limit. But if this article is correct about there not being a rebounding effect, then asking for an extravagant amount seems like your best move. Although I'm guessing that things are a bit different if they haven't indicated whether they plan to hire you or not, i.e. if this is something discussed in a screening interview, asking for an exorbitant salary will likely prevent you from moving forward. I'd also guess that in a trial, the plaintiff has no continued relationship with the jury, while in a job you probably don't want to have the reputation for being the person with completely deranged views of reality.
  - timwiseman 17y ago
    You make good points. But I think the difference is that juries have an absolute duty to try to be just. I think a lawyer is extremely unlikely to loose a case by trying to ask for too much money. On the other hand, a job candidate can loose the entire offer. If someone asks for a few grand more than what I was thinking, I think we can work something out and start negotiating. If someone asks for more than twice what I was thinking I may just keep looking.
    - cubicle67 17y ago
      The other difference is that the jury is spending other people's money
- zaidf 17y ago
  To add to this, my Dad also uses this with car sales people. 1. He picks the absolute bottom price. 2. Calls up the area dealerships within 50 miles 3. Tells them the model, price and his phone number to call back when they are ready to give him at his price He totally shuts off any attempts by the sales people to erase my Dad's first number with their own by insisting he does not care about any extra features and other bs. His number is also terribly low(ALMOST but not totally in the you're joking category) so typically he can get the car within $500 of his quoted number. What does work for him is he communicates certainty of his decision to buy a car which is a tad easier because he is a surgeon.
  - bantam 17y ago
    How low is his lowest price usually under normal price?
kscaldef 17y ago
I think the point there is that you need to name a number first, and be very aggressive about the number you pick. If you start with a number that you think is "agreeable", you'll end up with less than you could have gotten.
kulkarnic 17y ago
Because most people want to look reasonable at a job interview. However, one thing people miss is that the anchoring can be to any number whatsoever, so you don't even need to talk about what you want per hour. I remember a paper that asked participants to note down the last two digits of their social security, and subjects anchored themselves to that (statistically significantly- one of the authors was Dan Ariely). So, at the job interview, I am guessing just saying "You know, at my previous company, they had 98,000 employees" could anchor the interviewer to that number. Of course, this anchoring would be weaker than "$1M", but you could cut out the embarrassment bit.
- angkec 17y ago
  that's the best advice I've seen in while. Definitely gonna try this in my next job interview!
- neilc 17y ago
  I remember a paper that asked participants to note down the last two digits of their social security, and subjects anchored themselves to that (statistically significantly- one of the authors was Dan Ariely). Do you have a link? I am very skeptical that merely tossing out large-sounding numbers during an interview would have any influence on your likely salary range. In situations like that, your potential employer usually has a preconceived idea of what a "reasonable" salary for the position is; intuitively, you'd need to make a fairly strong suggestion to get them to anchor on a different figure (rather than, say, the salary they are already paying to other employees in a similar job function).
  - kulkarnic 17y ago
    Here you go: http://www.cepr.org/meets/wkcn/3/3509/Papers/Ariely.pdf http://www.cepr.org/meets/wkcn/3/3509/Papers/Ariely.pdf Btw, note that initial anchors grossly affect the decision; subsequent anchors are less effective. So, if the interviewer already has a figure in mind (or worse, has written it down), then you really have a lower chance of swaying the number. "making a fairly strong suggestion" may not move the anchor much. However, if neither knows a reasonable number, then any anchoring is significant (including numbers not pre-pended with a dollar sign- Kahnenann's 1974 paper).
breck 17y ago
I've heard this advice too and wonder the same thing. Perhaps not naming a number early is important because it takes time to figure out what the other side would potentially pay. Asking for $10,000 when someone could only pay $100 might be a terrible strategy. But if you figure out they could pay $1,000, then asking for $10,000 might not be too bad. The trick is to wait until you know more before you set the anchor.
dabent 17y ago
I worked through a recruiter for my current job, so I was asked to name a salary up front to make sure it met the client's frame. I named a price some 20% higher than they wanted to pay max, but in the end, the client (now my employer) came up 10% above their max to get me to join.
webwright 17y ago
While I hope to never be negotiating for a salary again, here's what I'd say when asked about a salary in a hypothetical job interview (to have my cake and eat it too): "What kind of salary do I want? That's a hard question, especially in light of the fact that working with you guys is the most interesting opportunity I'm evaluating. I'd expect offers around [insert aggressive number], but again- let me stress that I'm really excited about the idea of working with you. So if you guys can't afford that, I'd still really be interested in hearing your best offer."
- jeff18 17y ago
  I don't know if you'd want to make it extremely clear that the employer is your first choice and you would like to negotiate your salary to a lower point. It seems like you'd want the exact opposite of that.
  - timwiseman 17y ago
    I think it depends on how aggressive your aggressive offer is. It seems if you make a very aggressive number, you definitely want to signal strongly that you are willing to come down so they don't just move on to someone who starts with a lower number. And according to the article making that first offer very aggressive indeed seems to be taking advantage of the anchoring effect.
  - webwright 17y ago
    Yeah, if I thought I was worth $100k (and that they were going to offer me that), my aggressive # might be $150k or $200k. It's unlikely that they'd say, "Well gosh-- he really likes us, so let's offer him $80k". There's also a lot of powerful psychology about saying that you really want to work with them rather than playing hard to get. By saying, "you're my favorite!" (truth or not), you're establishing with them (in their minds) that you're an exceptional judge of character. :-)
    - gaius 17y ago
      It's unlikely that they'd say, "Well gosh-- he really likes us, so let's offer him $80k". But that is exactly what Google does actually do. Not on an individual basis mind, but as a general HR policy.
sorbits 17y ago
The reason for this advice is that the employer and the employee often have a number in mind when they enter the room. If the employee starts with a number below what the employer had in mind, the employer accepts it. If it is too high, the employer will suggest something lower, and the employee at least can’t go higher, and will likely end up lower than the number he gave. So you could say a better advice is to say your number first, but make it 150% of your actual number. On a related topic, a lot of tech guys I know undersell themselves. I have two employees and I asked both of them to go first, for the first one, I gave him more than he asked for :)
GrandMasterBirt 17y ago
Yes and no @ciniglio. Its all about the delivery. I can say that I want $300k salary on an interview for $80k salary. However it is how I say it, to indicate that my self-worth is $300k but I can settle for 80. They might actually bump it up to 85 because they feel that I am a worthwhile person. But I won't say "How much were you looking to get paid?" "$300,000" It would have to be as a joke, in some context where they know I am placing high self worth and the number is just a manifestation of it. The anchoring is all about worth. Your brain questions "what is the value of the following item/service" to which your memory tells you "no records found". Now the brain has no context, it must make one up. The anchoring is all about creating the context. If the context already exists, anchoring won't work, or will work marginally well (needs to be proven, need some salesmen comments plz).

zaidf 17y ago

I read on here few months ago that naming your own price first is better. Now I believe it! Recently we hired a sales person on PT basis. At the interview, she gave her expected salary to be about 2.5 times what I had thought about paying her. Now, I know about this notion of anchoring and yet I felt kind of embarrassed to make my initial offer. I fought off the urge to buy into her frame and ultimately made a decent offer but it was still significantly higher than what I had originally planned...and I credit much of it to her naming her price first! I do think there is an upper limit which if you cross, you risk getting the other party to TOTALLY ignore it as a joke. I came pretty close to doing that with our PT person.

mcantor 17y ago
It feels so hilariously appropriate that you were hiring a sales person, and they did a spectacular job of, as they say, "selling themselves."
- whatusername 17y ago
  http://xkcd.com/125/ http://xkcd.com/125/ covers it nicely.
- zaidf 17y ago
  Yes, she is good :) Her accomplishments included talking herself out of four speeding tickets and from going to jail in Columbia. We'll know soon how well she's doing that magic in selling our product!
ciniglio 17y ago
I agree with you that it seems like there should be an upper limit. But if this article is correct about there not being a rebounding effect, then asking for an extravagant amount seems like your best move. Although I'm guessing that things are a bit different if they haven't indicated whether they plan to hire you or not, i.e. if this is something discussed in a screening interview, asking for an exorbitant salary will likely prevent you from moving forward. I'd also guess that in a trial, the plaintiff has no continued relationship with the jury, while in a job you probably don't want to have the reputation for being the person with completely deranged views of reality.
- timwiseman 17y ago
  You make good points. But I think the difference is that juries have an absolute duty to try to be just. I think a lawyer is extremely unlikely to loose a case by trying to ask for too much money. On the other hand, a job candidate can loose the entire offer. If someone asks for a few grand more than what I was thinking, I think we can work something out and start negotiating. If someone asks for more than twice what I was thinking I may just keep looking.
  - cubicle67 17y ago
    The other difference is that the jury is spending other people's money
zaidf 17y ago
To add to this, my Dad also uses this with car sales people. 1. He picks the absolute bottom price. 2. Calls up the area dealerships within 50 miles 3. Tells them the model, price and his phone number to call back when they are ready to give him at his price He totally shuts off any attempts by the sales people to erase my Dad's first number with their own by insisting he does not care about any extra features and other bs. His number is also terribly low(ALMOST but not totally in the you're joking category) so typically he can get the car within $500 of his quoted number. What does work for him is he communicates certainty of his decision to buy a car which is a tad easier because he is a surgeon.
- bantam 17y ago
  How low is his lowest price usually under normal price?

kscaldef 17y ago

I think the point there is that you need to name a number first, and be very aggressive about the number you pick. If you start with a number that you think is "agreeable", you'll end up with less than you could have gotten.

kulkarnic 17y ago

Because most people want to look reasonable at a job interview. However, one thing people miss is that the anchoring can be to any number whatsoever, so you don't even need to talk about what you want per hour. I remember a paper that asked participants to note down the last two digits of their social security, and subjects anchored themselves to that (statistically significantly- one of the authors was Dan Ariely). So, at the job interview, I am guessing just saying "You know, at my previous company, they had 98,000 employees" could anchor the interviewer to that number. Of course, this anchoring would be weaker than "$1M", but you could cut out the embarrassment bit.

angkec 17y ago
that's the best advice I've seen in while. Definitely gonna try this in my next job interview!
neilc 17y ago
I remember a paper that asked participants to note down the last two digits of their social security, and subjects anchored themselves to that (statistically significantly- one of the authors was Dan Ariely). Do you have a link? I am very skeptical that merely tossing out large-sounding numbers during an interview would have any influence on your likely salary range. In situations like that, your potential employer usually has a preconceived idea of what a "reasonable" salary for the position is; intuitively, you'd need to make a fairly strong suggestion to get them to anchor on a different figure (rather than, say, the salary they are already paying to other employees in a similar job function).
- kulkarnic 17y ago
  Here you go: http://www.cepr.org/meets/wkcn/3/3509/Papers/Ariely.pdf http://www.cepr.org/meets/wkcn/3/3509/Papers/Ariely.pdf Btw, note that initial anchors grossly affect the decision; subsequent anchors are less effective. So, if the interviewer already has a figure in mind (or worse, has written it down), then you really have a lower chance of swaying the number. "making a fairly strong suggestion" may not move the anchor much. However, if neither knows a reasonable number, then any anchoring is significant (including numbers not pre-pended with a dollar sign- Kahnenann's 1974 paper).

breck 17y ago

I've heard this advice too and wonder the same thing. Perhaps not naming a number early is important because it takes time to figure out what the other side would potentially pay. Asking for $10,000 when someone could only pay $100 might be a terrible strategy. But if you figure out they could pay $1,000, then asking for $10,000 might not be too bad. The trick is to wait until you know more before you set the anchor.

dabent 17y ago

I worked through a recruiter for my current job, so I was asked to name a salary up front to make sure it met the client's frame. I named a price some 20% higher than they wanted to pay max, but in the end, the client (now my employer) came up 10% above their max to get me to join.

webwright 17y ago

While I hope to never be negotiating for a salary again, here's what I'd say when asked about a salary in a hypothetical job interview (to have my cake and eat it too): "What kind of salary do I want? That's a hard question, especially in light of the fact that working with you guys is the most interesting opportunity I'm evaluating. I'd expect offers around [insert aggressive number], but again- let me stress that I'm really excited about the idea of working with you. So if you guys can't afford that, I'd still really be interested in hearing your best offer."

jeff18 17y ago
I don't know if you'd want to make it extremely clear that the employer is your first choice and you would like to negotiate your salary to a lower point. It seems like you'd want the exact opposite of that.
- timwiseman 17y ago
  I think it depends on how aggressive your aggressive offer is. It seems if you make a very aggressive number, you definitely want to signal strongly that you are willing to come down so they don't just move on to someone who starts with a lower number. And according to the article making that first offer very aggressive indeed seems to be taking advantage of the anchoring effect.
- webwright 17y ago
  Yeah, if I thought I was worth $100k (and that they were going to offer me that), my aggressive # might be $150k or $200k. It's unlikely that they'd say, "Well gosh-- he really likes us, so let's offer him $80k". There's also a lot of powerful psychology about saying that you really want to work with them rather than playing hard to get. By saying, "you're my favorite!" (truth or not), you're establishing with them (in their minds) that you're an exceptional judge of character. :-)
  - gaius 17y ago
    It's unlikely that they'd say, "Well gosh-- he really likes us, so let's offer him $80k". But that is exactly what Google does actually do. Not on an individual basis mind, but as a general HR policy.

sorbits 17y ago

The reason for this advice is that the employer and the employee often have a number in mind when they enter the room. If the employee starts with a number below what the employer had in mind, the employer accepts it. If it is too high, the employer will suggest something lower, and the employee at least can’t go higher, and will likely end up lower than the number he gave. So you could say a better advice is to say your number first, but make it 150% of your actual number. On a related topic, a lot of tech guys I know undersell themselves. I have two employees and I asked both of them to go first, for the first one, I gave him more than he asked for :)

GrandMasterBirt 17y ago

Yes and no @ciniglio. Its all about the delivery. I can say that I want $300k salary on an interview for $80k salary. However it is how I say it, to indicate that my self-worth is $300k but I can settle for 80. They might actually bump it up to 85 because they feel that I am a worthwhile person. But I won't say "How much were you looking to get paid?" "$300,000" It would have to be as a joke, in some context where they know I am placing high self worth and the number is just a manifestation of it. The anchoring is all about worth. Your brain questions "what is the value of the following item/service" to which your memory tells you "no records found". Now the brain has no context, it must make one up. The anchoring is all about creating the context. If the context already exists, anchoring won't work, or will work marginally well (needs to be proven, need some salesmen comments plz).