By Seth Stevenson/Slate.com- In the world of head-to-head negotiations, the person who first suggests a dollar figure must do so carefully. The opening episode of Slate's Negotiation Academy (a podcast series I co-hosted) addressed this concept, with behavioral economist Dan Ariely explaining the importance of "anchoring": If I'm selling you a used curio, and we’re haggling over it, and neither of us is exactly sure what the curio’s proper value is, I'm better off naming an extremely high number right off the bat—instead of waiting for you to make a (presumably much lower) initial offer. By acting first and throwing my inflated number out there, I can psychologically "anchor" the bargaining around it. It's a powerful tactic that gives me an advantage as the negotiation proceeds.

Now comes news of some further tactical wisdom regarding initial prices. A paper released Monday by the National Bureau of Economic Researchargues that significantly different negotiation outcomes will result if that initial number I put forth is a rounded-off figure (such as $500) as opposed to a more precise amount (such as $498.92). 

Read the full article at Slate.com [HERE].