Knowledge of precise offers as a negotiating tactic does not reduce its effect on counteroffers

Abstract

Although irrelevant anchors are clearly a bias, we may encounter situations where relevant anchors are present, such as in negotiations. Negotiations involve uncertainty regarding what the parties are willing to pay or willing to accept for the item under discussion. Several studies have demonstrated that an initial offer in a negotiation may serve as an anchor for a counteroffer (Galinsky

The demand-what-you-want strategy to service recovery: achieving high customer satisfaction with low service failure compensation using anchoring and precision effects

“…Experiment 2 also extends these findings by showing that a precise standard compensation makes this effect stronger. A precise (and relatively high) standard compensation can result in lower compensation demands, even in comparison with a lower standard compensation, in line with research suggesting that precise anchor values enhance the magnitude of the anchoring effect (Janiszewski and Uy, 2008; Thorsteinson, 2021). Additionally, this suggests that standard compensations have an effect on customers' perceived justice (Chebat and Slusarczyk, 2005).…”

“…For example, whether a negation leads to a deal, or an impasse, can depend on whether buyers make precise or round offerings and this in turn interacts with the roundness of the sellers' list price (Petrowsky et al ., 2023). Moreover, precise offers tend to reduce the size of counteroffers in comparison with round offers (Thorsteinson, 2021). This precision effect thus suggests that precise numbers can lead to stronger anchoring points.…”