The best tip to win your negotiation: don't make a round offer.
7 July 2013
Read by 1847 persons
You just landed a job interview, a new job is available to you and with it the need to negotiate your future salary. In other words, this is not the time to mess up. In the United States, a study showed that those who negotiated the best salary for their first job earned an average of $5,000 more per year than others. Extended over a lifetime career, this gap could reach $500,000.
Whether you are buying a house, a car or negotiating a contract, the price difference caused by a good negotiation is far from marginal. So, how can you gain the upper hand when it comes to numbers? According to the results of a study by Columbia Business School, there is a very simple solution. Even if you are bluffing, you should offer a precise number rather than a round number to win the negotiation.
Better Informed
To find out, the researchers analyzed the exchanges of 1254 simulated negotiators. In a simulated situation, they had to negotiate things like jewelry or the sale of a used car. Researchers asked some to make round offers, such as $5,000 for a car, while others made more precise offers, such as $5,015 for the same car.
The result: those who made precise offers were perceived as being better informed about the true value of the item they were negotiating. The consequence? Their counterparts were willing to give up more of the asset's value. According to the researchers, by offering a precise number, these negotiators created the illusion that they were better informed. The psychological effect would be immediate: faced with a negotiator perceived as informed, the other would estimate that their room for maneuver is reduced and would be more inclined to give in.
To assess whether this type of practice was common, the researchers supplemented their study with research on the American real estate market. Not surprisingly, only 2% of property offers gave a precise number. According to Professor Malia Mason, "offering a precise number can be used in any negotiation, it simply shows that you are informed and have done your homework." Something that can save you time and money.
Huffingtonpost.fr
Posted July 7, 2013.
Whether you are buying a house, a car or negotiating a contract, the price difference caused by a good negotiation is far from marginal. So, how can you gain the upper hand when it comes to numbers? According to the results of a study by Columbia Business School, there is a very simple solution. Even if you are bluffing, you should offer a precise number rather than a round number to win the negotiation.
Better Informed
To find out, the researchers analyzed the exchanges of 1254 simulated negotiators. In a simulated situation, they had to negotiate things like jewelry or the sale of a used car. Researchers asked some to make round offers, such as $5,000 for a car, while others made more precise offers, such as $5,015 for the same car.
The result: those who made precise offers were perceived as being better informed about the true value of the item they were negotiating. The consequence? Their counterparts were willing to give up more of the asset's value. According to the researchers, by offering a precise number, these negotiators created the illusion that they were better informed. The psychological effect would be immediate: faced with a negotiator perceived as informed, the other would estimate that their room for maneuver is reduced and would be more inclined to give in.
To assess whether this type of practice was common, the researchers supplemented their study with research on the American real estate market. Not surprisingly, only 2% of property offers gave a precise number. According to Professor Malia Mason, "offering a precise number can be used in any negotiation, it simply shows that you are informed and have done your homework." Something that can save you time and money.
Huffingtonpost.fr
Posted July 7, 2013.
