ANCHORING

“People with incomplete info make estimates starting from an initial value (anchor) and adjusting to provide a final answer. The adjustments are usually inadequate. Irrelevant (as well as relevant) numbers can serve as anchors and influence perception of the bargaining zone.”

Does Making First Offer lead to a better outcome?

–YES, the more certain you are of counterpart’s BATNA!!

–Not necessarily if uncertain.

Receiving First Offer –

Anchor minimized if counter focuses on info inconsistent with first offer (i.e., discount it, ignore it) – focus on counterpart’s BATNA or r, your target price

Anchor maximized if counter focuses on info consistent with first offer (the anchor), your BATNA.

	Created by michael.rovinsky over 8 years ago

NEGOTIATIONS