Anchoring

Anchoring is one of the most well-documented effects in negotiation psychology. When a negotiator states the first number — whether a price, salary, or deadline — it establishes a reference point that subsequent discussion revolves around. Even when the anchor is arbitrary, research shows it pulls the final agreement in its direction.

How Anchoring Works

The anchoring effect operates through cognitive bias. Once a number is introduced, both parties unconsciously adjust from that starting point rather than evaluating the situation independently. A supplier who opens with €100,000 for a contract creates a mental frame where €80,000 feels like a significant concession, even if the fair market value is €60,000.

Using Anchoring Effectively

Effective anchoring requires preparation. The anchor must be ambitious enough to create room for negotiation but defensible enough that it does not damage credibility. An anchor that seems arbitrary or uninformed invites the other party to dismiss it and reset with their own.

In procurement, anchoring first with a well-researched target price shifts the negotiation in the buyer's favour. In sales, anchoring with the full value of a solution before discussing price frames the investment against the return.

Defending Against Anchors

When the other party anchors first, the most effective response is to explicitly acknowledge the anchor, then reset with your own counter-anchor rather than negotiating from their starting point. Saying "I appreciate you sharing that figure. Based on our analysis, we see this differently" breaks the anchor's psychological hold.

Practice is essential because the instinct to accept and adjust from an anchor is automatic. Only through repeated exposure do negotiators develop the habit of recognising and countering anchors effectively.