![]() The lesson? To maximize your outcome, focus on your ambitious goal during the negotiation. ![]() Notably, when these high-achieving participants were asked to consider their reservation prices (walk-away points) and then evaluate their outcomes, their satisfaction corresponded to objective measures of performance. Download our FREE special report, Negotiation Skills: Negotiation Strategies and Negotiation Techniques to Help You Become a Better Negotiator, from the Program on Negotiation at Harvard Law School. ![]() Although researchers Adam Galinsky, Victoria Medvec, and Thomas Mussweiler found in one study that negotiators who focused on high goals achieved objectively better outcomes than did peers who did not focus on high goals, the high-achieving negotiators were less satisfied with their outcomes than were their peers.īuild powerful negotiation skills and become a better dealmaker and leader. Most obviously, failure to reach your goal can affect your satisfaction with the overall outcome. Yet there are several potential drawbacks to setting ambitious negotiation goals. Even an unrewarded goal, however, such as running five miles today, boosts performance. Perhaps not surprisingly, performance improves when negotiators are given rewards for reaching a goal, such as a $10,000 bonus for billing 2,000 hours. In a review of goal-setting research, negotiation scholars Deborah Zetik and Alice Stuhlmacher of DePaul University found that when negotiators set specific, challenging goals, they consistently outperform those who set lower or vague goals. In negotiations, the anchoring effect occurs often, but goal setting can affect the end result. For example, the initial price offered for a used car sets the standard for the rest of the negotiations, so that prices lower than the initial price seem more reasonable even if they are still higher than what the car is really worth. Once an anchor is set, other judgments are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor. During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments. In all other situations, you will be aware of the anchor and you will think that it does not affect you, but you will be deceiving yourself.The anchoring effect is a cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions. In the case of a negotiation, you must focus on the minimum amount that the opponent would accept, or on what it would mean for the opponent not to reach an agreement. How to avoid this bias? It is frankly difficult, if not impossible. The average sentence of the judges who got a 3 was of 5 months of prison. The judges which got a 9 proposed a sentence of 8 months of prison, on average. Before answering loaded dice were thrown on the table so that the result was always going to be a 3 or a 9. In a disturbing experiment, a fair number of judges were asked to establish a prison sentence for a woman who had made a robbery. In fact, your judgment will be seriously influenced by any number, even if it is not informative and has no relation to the amount you are estimating. This effect is so strong that it reaches absurd limits. From there, a discount or a much better offer if you buy now, will be hard to resist even if the product remains expensive. The seller always makes the first move by fixing the price of a product or service, and gains advantage in the negotiation, since your estimate of the product value will be unconsciously anchored on that price. The effects of anchoring are used in a usual and quite effective way in marketing. I’m pretty sure that you’re tired of seeing images like this in the online world: Even if you think you’re one of those who do not let themselves be influenced, a house will seem more valuable to you if it has established a high price than if it has a low price. In the same way, when you make an estimate of the price of something, you are influenced by the initial price they ask for. For example, if someone asks you if Gandhi was over one hundred and four years old when he died and then asks you how old you think Gandhi was when he died, you will make a much higher estimate than if you had been asked first if Gandhi was over forty-four years old when he died.
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