5 ms·

When to Make the First Offer in Negotiations

74 points by kristiandupont 16y ago

patio11 16y 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 16y 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 16y 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 16y 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-Without/dp/0140157352 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 16y ago
  Bargaining For Advantage by G. Richard Shell (http://www.amazon.com/dp/0143036971/ http://www.amazon.com/dp/0143036971/) and 3D Negotiation by David Lax and James Sebenius (http://www.amazon.com/dp/1591397995/ http://www.amazon.com/dp/1591397995/) are even better than Getting to Yes, IMO.
schwit 16y 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 16y ago
  Similarly, every nice restaurant will have a $60 steak entree on the menu to make the $29 chicken entree appear more affordable.
lionhearted 16y 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.

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 16y 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 16y 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 16y 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-Without/dp/0140157352 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 16y ago
Bargaining For Advantage by G. Richard Shell (http://www.amazon.com/dp/0143036971/ http://www.amazon.com/dp/0143036971/) and 3D Negotiation by David Lax and James Sebenius (http://www.amazon.com/dp/1591397995/ http://www.amazon.com/dp/1591397995/) are even better than Getting to Yes, IMO.

schwit 16y 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 16y ago
Similarly, every nice restaurant will have a $60 steak entree on the menu to make the $29 chicken entree appear more affordable.

lionhearted 16y 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.