Scholars of psychology, politics, and business love studying how people negotiate, both because there are obvious practical ramifications to such research and because negotiation scenarios can reveal some interesting aspects of human nature. But as Daniel Ames and Malia Mason of Columbia Business School write in a new paper in the Journal of Personality and Social Psychology, when it comes to the simple-seeming question of whether an initial offer made during a negotiation should be a single figure or a range, “the scholarly literature appears silent.”
The duo wanted to change that, so they ran a series of five negotiation-simulation experiments involving Amazon Mechanical Turk workers and business-school students. Respondents were asked not just what they thought their negotiation partner’s reservation price (that is, lowest acceptable offer) was, but also questions designed to reveal how they perceived their partner — the researchers wanted to know whether certain negotiation tactics, even if they might work in squeezing a few more dollars out of your partner, might incur a likability cost.
Overall, their results suggest that range offers are the way to go. If you’re selling a laptop on Craigslist and hoping to get $400 for it, then all things being equal, you’re better off asking for “Between $400 and $440” than simply $400 — you’ll likely get more for the laptop, and there’s little evidence you’ll be seen in a worse light. You can’t draw perfectly straight lines between this sort of study and real-world negotiations, of course, but the researchers are pretty sure they know what’s going on here: Simply put, the presence of two values causes the perception of the reservation price to climb upward a bit relative to what it would be if only the lower number were there.
In other words, when I see on a Craigslist ad that someone wants $400 for a laptop, I’ll likely think “I can probably get it for $350.” If I see they want between $400 and $440, I’ll probably think twice about making that sort of counteroffer — maybe I’ll offer $380 instead. Probably worth keeping in mind the next time you apply for a job that asks you to request a salary.
