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Comment by VMG | Hacker News Reader

Scientific research agrees with you. The concept is called anchoring

Anchoring research helps clarify the question of whether to make the first offer in a negotiation: by making the first offer, you will anchor the negotiation in your favor. In fact, Mussweiler and I have shown that making the first offer affords a bargaining advantage. In our studies, we found that the final outcome of a negotiation is affected by whether the buyer or the seller makes the first offer. Specifically, when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer.

http://hbswk.hbs.edu/archive/4302.html

http://en.wikipedia.org/wiki/Anchoring

The whole article could use a lot more science. I suggest reading "59 Seconds" from Richard Wiseman.

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I was under the impression that putting out the first number anchors the negotiation around that number, not necessarily in one's favor. For example, if you think you want to earn 100k, and they were hoping to keep you under 125k, throwing out a number of $110k is not giving you the advantage, as they may have thrown out a first number of $115k if you had let them.

This is more reason to research the company's salaries up front. If they were planning to lowball you and you put out a high number, it may help you, but if you don't know anything about the company, it may be more beneficial to let them make the first move (unless you have multiple options open and are willing to say a high number).

the problem is that salaries aren't uniform for all companies.

so if you go by glassdoor, you'll see that some engineers make $40K/yr, while others make $150K/yr in the same area.

If you go by listed salaries on job descriptoins, once again on monster.com you might see jobs posted at $100-150K/yr...while others, for pretty much the same exact requirement list/job description you'll see $50K

The good thing though, is that if you ask for more than they can afford, they'll almost always tell you their real number. So just ask for 1/3 more, i.e. if you want 90K, ask for $120K, then watch them come up with a 100-110K counter offer....and who knows, you might just get that $120K

In fact VMG's HBS link, which generally encourages making the first offer, includes this caveat:

> There is one situation in which making the first offer is not to your advantage: when the other side has much more information than you do about the item to be negotiated or about the relevant market or industry. For example, recruiters and employers typically have more information than job candidates do...

If I can get to the point where I understand the market as well or better than the potential hirer, I'll try to make an anchoring first offer. Usually I can't.

If that is the case, you shouldn't accept any offer at all - how would you know that you are being fooled?

It still makes sense to accept an offer (even if you could be getting screwed), if that offer remains substantially better than what you're currently receiving.

Considering that anchoring works with completely unrelated numbers, I wonder how well it would work to ask the population of Tallahassee, or the distance in miles to the moon, right before you start talking dollars.

Or ask about last quarter's gross profit... ;-)

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