Humans and other animals

The trick to successful haggling

Psychologist Malia Mason, a professor at Columbia University’s business school, recruited volunteers to test a theory that assigning a precise value is a better haggling strategy than rounding your offer up (or down):

The study’s hard data will not be revealed until the paper is published this month, but the broad conclusion was unmistakable: people who offered or asked for precise amounts — including such arbitrary-seeming figures as $5,015 for a piece of jewelry as opposed to $5,000 — almost always wrung more concessions from the person on the other side of the table than those who opened with neater numbers. The reason, Mason believes, is that a precise number — rightly or wrongly — implies you’ve done your homework and know the actual value of the thing.

“It’s a powerful signal,” she says. “It suggests, ‘I know what I’m taking about.’” Even if the negotiations are protracted, a precise figure at least frames the discussion. “If you say you want $10 for something, the other party takes that to mean a range of $7 to $13. If you say you want $11, that range becomes $10 to $12. The initial figure exerts a kind of gravitational pull.”
Revealed: The One Big Secret to Successful Haggling

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