Publication Type

Journal Article

Version

acceptedVersion

Publication Date

10-2016

Abstract

Past research has suggested a fundamental principle of price precision: The more precise an opening price, the more it anchors counteroffers. The present research challenges this principle by demonstrating a too-much-precision effect. Five experiments (involving 1,320 experts and amateurs in real-estate, jewelry, car, and human-resources negotiations) showed that increasing the precision of an opening offer had positive linear effects for amateurs but inverted-U-shaped effects for experts. Anchor precision backfired because experts saw too much precision as reflecting a lack of competence. This negative effect held unless first movers gave rationales that boosted experts’ perception of their competence. Statistical mediation and experimental moderation established the critical role of competence attributions. This research disentangles competing theoretical accounts (attribution of competence vs. scale granularity) and qualifies two putative truisms: that anchors affect experts and amateurs equally, and that more precise prices are linearly more potent anchors. The results refine current theoretical understanding of anchoring and have significant implications for everyday life.

Keywords

anchoring, judgment, negotiation, first offers, precision, experts versus amateurs, open data, open materials

Discipline

Organizational Behavior and Theory | Organization Development

Research Areas

Organisational Behaviour and Human Resources

Publication

Psychological Science

Volume

27

Issue

12

First Page

1573

Last Page

1587

ISSN

0956-7976

Identifier

10.1177/0956797616666074

Publisher

Association for Psychological Science

Copyright Owner and License

Authors

Comments

All data and materials have been made publicly available via the Open Science Framework and can be accessed at https://osf.io/b8zft/.

Additional URL

https://doi.org/10.1177/0956797616666074

Download

Share

COinS