Bargaining Strategies: Navigating the Initial Proposal Predicament in Discussions
In a recent study conducted by researchers from Duke University, the University of Michigan, and the University of Houston, the strategy of making the first offer in negotiations was put to the test. The study, led by authors Ashleigh Shelby Rosette, Shirli Kopelman, and JeAnna Abbott, involved MBA students negotiating a single-issue price deal and recording who made the first offer, the amount of the offer, and the deal outcome.
The study did not provide a definitive answer on whether to always make the first offer in negotiations. While making the first offer can anchor the negotiation in your favour, particularly if the bargaining range is known and the counterpart is unaware, it may cause anxiety and reduce satisfaction for the negotiators. The subjects were also asked about their emotional state during the negotiation scenarios, and it was found that those who made the first offer felt more anxiety and were less satisfied with their outcomes.
However, the study suggests that the advantages of using anchoring in negotiation may outweigh the potential disadvantages. Economically, negotiators who made the first offer did better, but the authors did not discuss the potential downsides of this strategy in negotiations. The study did not explore the long-term effects of making the first offer on negotiation outcomes either.
The authors did not specify what this "personal antidote" might be to prevent feelings of anxiety, nor did they provide specific examples of this in action. They also did not discuss the potential benefits of not making the first offer in negotiations or the potential psychological impact of not doing so.
The study on the first offer strategy in negotiations involved personalities such as Richard E. Walton and Robert B. MacKenzie, but it did not discuss finding a "personal antidote" to prevent feelings of anxiety. The study provides evidence that might reconcile the competing perspectives on whether to make the first offer in negotiations, but it did not mention the potential downsides of making the first offer.
It's worth noting that the study did not involve real-world examples of negotiation, and the findings may not be directly applicable to all negotiation scenarios. Some negotiators may find it helpful to role-play making the first offer in a safe simulation setting to build comfort.
In conclusion, while making the first offer in negotiations can anchor the negotiation favourably, it may also cause anxiety and reduce satisfaction. The study provides some evidence to support the use of anchoring in negotiations, but it does not provide a definitive answer on whether to always make the first offer. Negotiators may want to consider the potential advantages and disadvantages of this strategy and find their own "personal antidote" to manage any anxiety that may arise.
