Request a Precise Range of Prices

Negotiating on price?

Ask for a range of prices. Researchers compared requests for an $80k salary:

• Target at Top: $70k – $80k
• Target in Middle: $75 – $85k
• Target at Bottom: $80k – $90k
• Single High Point: $90k

Recipients earned the highest salary by placing their $80k target at the bottom of the range (e.g., $80k to $90k; Ames & Mason, 2015).

But this range should be precise, like $81k to $93k.

Precise numbers activate a mental ruler with smaller increments:

...the resolution of this scale might also influence the amount of adjustment. X units of adjustment along a fine-resolution scale will cover less objective distance than the same number of units of adjustment along a coarse-resolution scale (Janiszewski & Uy, 2008, p. 121)

An $80k salary implies broad increments (e.g., $75k, $70k), whereas $81k implies narrow increments (e.g., $79k, $77k) that result in smaller jumps in any counteroffer.

Stronger For

• Large Prices. A $395,425 home feels cheaper than a $395,000 home (Thomas et al., 2010).

Why Precision

• Less Willing to Negotiate. eBay sellers appear willing to negotiate when they charge multiples of $100, which reduces their offer sizes by 5%–8% (Backus et al., 2015).
• Feels Smaller. Small values (e.g., 1 or 2) are rarely rounded, so $81k feels smaller (Thomas et al., 2010).
• Determined By Costs. $81k seems fairer (Peev & Mayer, 2017).

How to Apply

• Include More Odd Digits. Odd digits feel more precise, so $437 might feel smaller than $428.
• Abbreviate With a Decimal. What if your price has a few zeroes, like $395,500? Try abbreviating with decimal notation, such as $395.5k. This version is more precise (and linguistically shorter).

• Ames, D. R., & Mason, M. F. (2015). Tandem anchoring: Informational and politeness effects of range offers in social exchange. Journal of personality and social psychology, 108(2), 254.
• Backus, M., Blake, T., & Tadelis, S. (2015). Cheap talk, round numbers, and the economics of negotiation (No. w21285). National Bureau of Economic Research.
• Janiszewski, C., & Uy, D. (2008). Precision of the anchor influences the amount of adjustment. Psychological Science, 19(2), 121-127.