Effective Use of the Anchoring Bias In Negotiation
In mediation, like all negotiations, there is often a reluctance to be the first to set out a number, whether that is an offer or a demand. Sales people are taught that this is a mistake because the first number has a significant influence on the buying decision. Consider the effect of the MSRP on the car buying/pricing decision. Research confirms that anchoring a negotiation by making the first realistic offer/demand has a significant impact on where the negotiation settles. What is Anchoring? An article from the Harvard Program on Negotiation’s Katie Shonk defines anchoring bias as “the common tendency to give too much weight to the first number put forth in a discussion and then inadequately adjust from that starting point, or the ‘anchor.’” The article refers to a Harvard Business School simulation in which one student (playing the role of an employer) spent time before the actual negotiation
