I recently read an interesting article in Psychology Today about negotiation that I wanted to share with you. In the article, Art Markman presents findings from a study in the Journal of Personality and Social Psychology that analyzed the role of persuasion in negotiations.
For example, if you are interested in buying a house, the seller might ask for $350,000, arguing that the house was newly renovated and is near good schools. Maaravi, Gonzach, and Pazy argued that when people hear an argument in favor of the initial offer, they think of counter-arguments. These counterarguments may actually push the counteroffer further away from the initial offer than it would have been had there been no persuasive argument. Someone looking at a house might find all the areas that still need renovation and think about other houses even closer to the better schools in town and give a low offer on the house.
The study also highlights the importance of the first offer as it serves as an anchor for the rest of the negotiations. The author therefore recommend that you make the initial offer but resist the urge to justify it. Just let the other counter-party come back with a counteroffer. They believe that the counter-offer will be closer to your initial offer as long as you did not attempt to justify it.
The article is an interesting read for anyone involved in negotiations.