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In a negotiation, is it best to be the first to say the price?

IN: Client Relations.23 JANUARY, 2019
In a negotiation, is it best to be the first to say the price?

In negotiation, there are those who say that it is best to let the others make their price proposal, as it may be higher than what we had thought. In reality, most people do not want to be the first to say the price.

 

Let's look at what psychology tells us about this.

 

Take a very challenging example that is wage bargaining. Imagine you are going to a job interview and you know that this topic will be addressed. Let's consider that you aim at a monthly salary of 1500 euros.

 

In psychology, there is a cognitive bias called "anchoring effect" - in which the first information we provide will be the anchor in the decision-making of the other person. In this example, taking into account the target of 1500 euros, you could make an initial offer of 2000 euros. The interviewer will use these 2000 euros as an anchor to set your salary. In negotiation, higher bids lead to more favorable results, due to this anchoring effect.

 

While it is necessary to be careful not to submit excessively high offers, it is also important to define the break point, that is, the least we are willing to accept. In this example, it could be a minimum value of 1000 euros.

 

If you had made an initial offer of 1500 euros, you could have much lower results than someone who had made an initial offer of 2,000 euros. The first number that is released dictates the negotiation. Therefore, if you want to have control of the negotiation process, be the first to say it.

 

We recommend testing these strategies with two colleagues, on another topic. Set equal trading goals, but with one of your colleagues make a higher initial offer and the other colleague make a lower one. See the result and share it with us!

 

 

Beatriz Luz |Trainee at Bright Concept