Whether you’re negotiating a business deal, a home sale or purchase, a salary, or bedtime with your toddler, you can use a cognitive bias we all have, the Anchoring Bias to your advantage.
The Anchoring Bias is simply our tendency to use an anchor point to make a decision. Typically, people put too much weight on pre-existing or early information that they “anchor” on to make a decision. That early information can either be incorrect or in negotiations, it can be the other party’s starting number.
For example, if you are purchasing new golf clubs, and find a set for $2,000, and the next one you find that is comparable is $1,500, you are likely to see the second set for $1,500 as a good deal. This may, or may not be true, but certainly, your analysis will be affected by your initial anchoring price of $2,000. Listing prices of homes and salary ranges on job offers are attempts to control the anchoring point.
You can leverage this cognitive bias in negotiations by controlling the anchoring point, which means getting your offer out first. Then, the best strategy tends to be to stay silent. Do not say the next word, let the other party sit, process, and respond. This forces them to absorb your anchor number and use it as the basis to make their counter.
We recommend trying this out with a toddler before a business setting but give it a try!