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Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets

Research output: Journal contributions › Journal articles › Research › peer-review

Standard

Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets. / Lee, Alice J.; Loschelder, David D.; Schweinsberg, Martin et al.
In: Organizational Behavior and Human Decision Processes, Vol. 148, 01.09.2018, p. 87-100.

Research output: Journal contributions › Journal articles › Research › peer-review

Harvard

Lee, AJ, Loschelder, DD, Schweinsberg, M, Mason, MF & Galinsky, AD 2018, 'Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets', Organizational Behavior and Human Decision Processes, vol. 148, pp. 87-100. https://doi.org/10.1016/j.obhdp.2018.03.001

APA

Lee, A. J., Loschelder, D. D., Schweinsberg, M., Mason, M. F., & Galinsky, A. D. (2018). Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets. Organizational Behavior and Human Decision Processes, 148, 87-100. https://doi.org/10.1016/j.obhdp.2018.03.001

Vancouver

Lee AJ, Loschelder DD, Schweinsberg M, Mason MF, Galinsky AD. Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets. Organizational Behavior and Human Decision Processes. 2018 Sept 1;148:87-100. doi: 10.1016/j.obhdp.2018.03.001

Bibtex

@article{ac6c7f63e13e4260a1044b76bca5dd9e,
title = "Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets",
abstract = "Prior research shows that precise first offers strongly anchor negotiation outcomes. This precision advantage, however, has been documented only when the parties were already in a negotiation. We introduce the concept of negotiation entry, i.e., the decision to enter a negotiation with a particular party. We predict that precise prices create barriers-to-entry, reducing a counterpart's likelihood of entering a negotiation. Six studies (N = 1580) and one archival analysis of real estate data (N = 11,203) support our barrier-to-entry prediction: Potential negotiators were less likely to enter a negotiation with precise- versus round-offer makers. Using both statistical mediation and experimental-causal-chain analyses, we establish that perceptions of offer-maker inflexibility underlie the precision barrier. Furthermore, we demonstrate that the precision mechanism (inflexibility) is distinct from the extremity mechanism (being offended) that produces barriers-to-entry from extreme first offers. The discussion theoretically integrates research on first-offer precision and extremity by offering the Precision-Extremity Model of First Offers.",
keywords = "Anchor precision, Barriers-to-entry, Decision making, First offers, Negotiation entry, Social attribution, Psychology, Business psychology",
author = "Lee, {Alice J.} and Loschelder, {David D.} and Martin Schweinsberg and Mason, {Malia F.} and Galinsky, {Adam D.}",
year = "2018",
month = sep,
day = "1",
doi = "10.1016/j.obhdp.2018.03.001",
language = "English",
volume = "148",
pages = "87--100",
journal = "Organizational Behavior and Human Decision Processes",
issn = "0749-5978",
publisher = "Academic Press Inc.",

}

RIS

TY - JOUR

T1 - Too precise to pursue

T2 - How precise first offers create barriers-to-entry in negotiations and markets

AU - Lee, Alice J.

AU - Loschelder, David D.

AU - Schweinsberg, Martin

AU - Mason, Malia F.

AU - Galinsky, Adam D.

PY - 2018/9/1

Y1 - 2018/9/1

N2 - Prior research shows that precise first offers strongly anchor negotiation outcomes. This precision advantage, however, has been documented only when the parties were already in a negotiation. We introduce the concept of negotiation entry, i.e., the decision to enter a negotiation with a particular party. We predict that precise prices create barriers-to-entry, reducing a counterpart's likelihood of entering a negotiation. Six studies (N = 1580) and one archival analysis of real estate data (N = 11,203) support our barrier-to-entry prediction: Potential negotiators were less likely to enter a negotiation with precise- versus round-offer makers. Using both statistical mediation and experimental-causal-chain analyses, we establish that perceptions of offer-maker inflexibility underlie the precision barrier. Furthermore, we demonstrate that the precision mechanism (inflexibility) is distinct from the extremity mechanism (being offended) that produces barriers-to-entry from extreme first offers. The discussion theoretically integrates research on first-offer precision and extremity by offering the Precision-Extremity Model of First Offers.

AB - Prior research shows that precise first offers strongly anchor negotiation outcomes. This precision advantage, however, has been documented only when the parties were already in a negotiation. We introduce the concept of negotiation entry, i.e., the decision to enter a negotiation with a particular party. We predict that precise prices create barriers-to-entry, reducing a counterpart's likelihood of entering a negotiation. Six studies (N = 1580) and one archival analysis of real estate data (N = 11,203) support our barrier-to-entry prediction: Potential negotiators were less likely to enter a negotiation with precise- versus round-offer makers. Using both statistical mediation and experimental-causal-chain analyses, we establish that perceptions of offer-maker inflexibility underlie the precision barrier. Furthermore, we demonstrate that the precision mechanism (inflexibility) is distinct from the extremity mechanism (being offended) that produces barriers-to-entry from extreme first offers. The discussion theoretically integrates research on first-offer precision and extremity by offering the Precision-Extremity Model of First Offers.

KW - Anchor precision

KW - Barriers-to-entry

KW - Decision making

KW - First offers

KW - Negotiation entry

KW - Social attribution

KW - Psychology

KW - Business psychology

UR - http://www.scopus.com/inward/record.url?scp=85050943080&partnerID=8YFLogxK

U2 - 10.1016/j.obhdp.2018.03.001

DO - 10.1016/j.obhdp.2018.03.001

M3 - Journal articles

AN - SCOPUS:85050943080

VL - 148

SP - 87

EP - 100

JO - Organizational Behavior and Human Decision Processes

JF - Organizational Behavior and Human Decision Processes

SN - 0749-5978

ER -

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DOI