your reality. Then, when they come back with a merely
absurd offer it will seem reasonable, just like an expensive
$400 iPhone seems reasonable after they mark it down from
a crazy $600.
The tendency to be anchored by extreme numbers is a
psychological quirk known as the “anchor and adjustment”
effect. Researchers have discovered that we tend to make
adjustments from our first reference points. For example,
most people glimpsing 8 × 7 × 6 × 5 × 4 × 3 × 2 × 1 estimate
that it yields a higher result than the same string in reverse
order. That’s because we focus on the first numbers and
extrapolate.
That’s not to say, “Never open.” Rules like that are easy
to remember, but, like most simplistic approaches, they are
not always good advice. If you’re dealing with a rookie
counterpart, you might be tempted to be the shark and throw
out an extreme anchor. Or if you really know the market
and you’re dealing with an equally informed pro, you might
offer a number just to make the negotiation go faster.
Here’s my personal advice on whether or not you want
to be the shark that eats a rookie counterpart. Just
remember, your reputation precedes you. I’ve run into
CEOs whose reputation was to always badly beat their
counterpart and pretty soon no one would deal with them.
- ESTABLISH A RANGE
While going first rarely helps, there is one way to seem to
make an offer and bend their reality in the process. That is,
by alluding to a range.