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Precise Negotiations

June 18, 2013

Using precise numbers may give you an advantage in negotiations.

Transcript

BOB HIRSHON (host):

Precise negotiation. I’m Bob Hirshon and this is Science Update.

When bargaining over a house, a car, or even a salary, being especially precise could give you a leg up. This according to researchers at Columbia Business School. Psychologist Malia Mason’s team found that in model negotiations, people who made a precise opening offer, like five thousand fifteen dollars, fared better than those who led with a round number like five thousand. Comments from their trading partners explained why.

MALIA MASON (Columbia University Business School):

People who use precise offers in negotiations give the impression that they’re informed, that they’re knowledgeable, that they have a strong understanding of the market value of something.

HIRSHON:
That resulted in bigger concessions from the other party. Mason cautions that this is just one aspect of negotiation. But she says most people seem to default to round numbers, and changing that habit might pay off. I’m Bob Hirshon for AAAS, the Science society.