- People who sell themselves short will inevitably lose out when trying to get what they want.
- New research involving job hiring scenarios shows the advantage of boosting your own sense of power.
- By taking stock before rushing into a decision, you can give yourself the best chance to succeed.
There are many times in the course of daily life when you need to put your negotiation skills to the test. Perhaps you want to trade off chores with your partner or are faced with the need to make a major new appliance purchase from a retailer known to make deals. In either case, you will have to make some sort of offer.
As absurdly different as these situations seem to be, they do share one crucial element. You have to come up with some proposal for the swap, or a dollar amount to put on the table. Although you hate having to negotiate and would rather just accede to the other person’s wishes, you know it’s foolish not to put your own best interests first.
Power and Negotiation
According to Reichman University’s Yossi Maaravi and colleagues (2023), there is fortunately a remedy for your disinclination to get involved in a price war and it’s probably not what you think it is. Researchers in the field recommend, and you might agree, that it’s best to put your number out there first. This way, you can be sure that you’ve made clear what you’re willing to do or pay to seal the deal. However, practitioners working in the field of negotiation recommend the opposite. Let the other person make the first move and you then follow with either an agreement or your own counteroffer.
Maaravi and his research team propose that there may be a solution to this paradox. The key factor in any negotiation, they argue, is power. However, it’s not just the power you have, it’s the power you think you have. In the words of the authors, “low-power negotiators might be influenced (or anchored) by their own inferior alternatives when deciding the amount of their first offers” (p. 8). What they mean here by anchors is a social psychological process in which providing a number (whether a price or a rating scale) sets a reference point that becomes hard to ignore. For example, if you asked someone to guess whether Mount Everest is taller than 2,000 feet, it’s likely that this person will give a lower estimate than if you started with 4,000 feet. Thus, people are biased by the number that someone gives them before making their own estimate.
Anchoring can also come in the form of self-anchoring. As implied in the quote, if the anchor is an internal one based on your perception of yourself as deficient in some way, then you’ve lost even before you started. You might tell your partner, for example, that you’ll wash the dishes every night for 2 weeks if they would just pick up an online order shipped to a store 25 minutes away. Going overboard like this with your offer wasn’t necessary, but it probably stemmed either from the guilt you felt about making this request or your general belief that you’re not “worthy” of your partner’s help.
Setting too low an anchor clearly puts you at a disadvantage, then, when you’re making the first move. So, despite what the research says, should you just sit back and wait for the other offer to come in and then see how things go? Or should you follow the research and just force yourself to double any offer toward your advantage to create a high anchor?
Testing Power, Self-Anchors, and Negotiation
To test the difference between practical and evidence-based advice, Maaravi and his coauthors designed two online experiments on samples of adults who were randomly selected for the role of employer or job candidate. The researchers created scenarios in which the “candidates” came into the negotiation with a prior offer of a low, medium, or high salary. The “employers” also received information intended to affect the offers they made to candidates based on the reverse power scale. This power scale was based on the employer being told that Candidate X requested a high salary but that there was also a Candidate Y to whom they were supposed to make an offer, thereby pushing the employer to consider a higher offer to Candidate Y, based on X's anchor.
The outcome measures in the negotiation included whether the participants in each role preferred to make the first offer (vs. a counteroffer) and if so, what it would be. Defined as “reservation price,” this equaled the lowest salary that candidates would accept, and the highest the employers would offer. If power makes a difference, the first offer of those dealing with adverse conditions (i.e. low power) should be lower than the first offer of those who believed that they could make an offer that would be advantageous to them.
A second study with similar participants added the effect of self-anchoring. Participants read instructions telling them not to pay attention to the offer but instead to their “target,” the “ideal salary you would like to get.” Additionally, in contrast to the first experiment, all participants believed themselves to be low in power via manipulation of the salary each thought they could command.
Turning to the results, there was a distinct disadvantage of making first offers for participants believing themselves to be lower in power. Both candidates and employers made worse offers when they believed that they were not in as good a position as the other party. In the words of the authors, “Weak negotiators are better off moving second.” This effect of power was so strong that the self-anchoring condition had no effect on the size of salary offers. It might be helpful to come up with your own ideal salary, based on this finding, but if you perceive yourself to be weak in power, that proposal will be lower than what you could get as a counteroffer.
3 Steps for Strengthening Your Negotiating Tactics
Based on the Israeli findings, when in doubt, you should wait it out. Indeed, the authors provide a specific set of steps to consider when you aren’t sure of where you stand vis-a-vis the other person. Mainly, as they warn, “Do not rush.” Consider instead these steps when an offer is up for debate:
- Be the one who makes the counteroffer
- Think of yourself as worthy of the better offer
- De-bias yourself from an artificially low self-anchor
Translating all of this to daily life, you can see that there are many factors at play any time you’re trying to strike a deal. If it’s a situation involving your romantic partner, you may be more willing (and maybe better off) to make altruistic types of offers rather than trying to vie for the best outcome for yourself, just to maintain harmony. However, if this becomes a pattern, it may be time to upscale your own self-anchors.
If the situation is one in the world of retail or business, the main message from the Maaravi et al. study is to proceed logically. Your heart may jump at the thought of a new washing machine with all the bells and whistles, but before you agree to a price, give yourself time to consider the alternatives. Similarly, you might be so desperate for the position you've applied for that you'll take whatever they throw your way. Stop and force yourself to ask whether you could command a higher salary than you've given yourself credit for.
To sum up, feeling that you’re at a disadvantage can be the main obstacle to coming up with negotiated results that are not in your best interests. Setting your own internal “anchor” a bit higher can help ensure that your self-esteem matches your true self-worth.
Maaravi, Y., Heller, B., & Levy, A. (2023). Low power, first offers, and reservation prices: Weak negotiators are self‐anchored by their own alternatives. Negotiation Journal, 39(1), 7–34. doi: 10.1111/nejo.12423