I do think there is an upper limit which if you cross, you risk getting the other party to TOTALLY ignore it as a joke. I came pretty close to doing that with our PT person.
1. He picks the absolute bottom price.
2. Calls up the area dealerships within 50 miles
3. Tells them the model, price and his phone number to call back when they are ready to give him at his price
He totally shuts off any attempts by the sales people to erase my Dad's first number with their own by insisting he does not care about any extra features and other bs. His number is also terribly low(ALMOST but not totally in the you're joking category) so typically he can get the car within $500 of his quoted number. What does work for him is he communicates certainty of his decision to buy a car which is a tad easier because he is a surgeon.
If someone asks for a few grand more than what I was thinking, I think we can work something out and start negotiating. If someone asks for more than twice what I was thinking I may just keep looking.
"What kind of salary do I want? That's a hard question, especially in light of the fact that working with you guys is the most interesting opportunity I'm evaluating. I'd expect offers around [insert aggressive number], but again- let me stress that I'm really excited about the idea of working with you. So if you guys can't afford that, I'd still really be interested in hearing your best offer."
There's also a lot of powerful psychology about saying that you really want to work with them rather than playing hard to get. By saying, "you're my favorite!" (truth or not), you're establishing with them (in their minds) that you're an exceptional judge of character. :-)
But that is exactly what Google does actually do. Not on an individual basis mind, but as a general HR policy.
So you could say a better advice is to say your number first, but make it 150% of your actual number.
On a related topic, a lot of tech guys I know undersell themselves. I have two employees and I asked both of them to go first, for the first one, I gave him more than he asked for :)
However, one thing people miss is that the anchoring can be to any number whatsoever, so you don't even need to talk about what you want per hour. I remember a paper that asked participants to note down the last two digits of their social security, and subjects anchored themselves to that (statistically significantly- one of the authors was Dan Ariely).
So, at the job interview, I am guessing just saying "You know, at my previous company, they had 98,000 employees" could anchor the interviewer to that number. Of course, this anchoring would be weaker than "$1M", but you could cut out the embarrassment bit.
However, this anchoring is definitely weaker, so your point is taken.
edit - (Just realized you were referring to Dan Ariely)
Do you have a link? I am very skeptical that merely tossing out large-sounding numbers during an interview would have any influence on your likely salary range. In situations like that, your potential employer usually has a preconceived idea of what a "reasonable" salary for the position is; intuitively, you'd need to make a fairly strong suggestion to get them to anchor on a different figure (rather than, say, the salary they are already paying to other employees in a similar job function).
Btw, note that initial anchors grossly affect the decision; subsequent anchors are less effective. So, if the interviewer already has a figure in mind (or worse, has written it down), then you really have a lower chance of swaying the number. "making a fairly strong suggestion" may not move the anchor much.
However, if neither knows a reasonable number, then any anchoring is significant (including numbers not pre-pended with a dollar sign- Kahnenann's 1974 paper).
Perhaps not naming a number early is important because it takes time to figure out what the other side would potentially pay. Asking for $10,000 when someone could only pay $100 might be a terrible strategy. But if you figure out they could pay $1,000, then asking for $10,000 might not be too bad.
The trick is to wait until you know more before you set the anchor.
Its all about the delivery. I can say that I want $300k salary on an interview for $80k salary. However it is how I say it, to indicate that my self-worth is $300k but I can settle for 80. They might actually bump it up to 85 because they feel that I am a worthwhile person. But I won't say
"How much were you looking to get paid?"
"$300,000"
It would have to be as a joke, in some context where they know I am placing high self worth and the number is just a manifestation of it.
The anchoring is all about worth. Your brain questions "what is the value of the following item/service" to which your memory tells you "no records found". Now the brain has no context, it must make one up. The anchoring is all about creating the context. If the context already exists, anchoring won't work, or will work marginally well (needs to be proven, need some salesmen comments plz).