“When your anchor sinks your boat” : A replication and extension study

Publication date: Available online 3 January 2019Source: Journal of Economic PsychologyAuthor(s): Cheng-Ming Jiang, Jia-Tao MaAbstractMost of the literature on behavioral decision-making suggests the presence of a first-mover advantage in negotiations, and this is based on the anchoring heuristic. Maaravi and Levy (2017) recently demonstrated a second-mover advantage in distributive situations, in which one party has information about the market value while the other does not. Because this finding contradicts most of the previous literature, we replicated their Studies 3 and 4, in which the seller had information about the market value while the buyer did not. Our Study 1 asked both the seller and the buyer to move first and provide their offer, and our Study 2 asked participants to role-play actual negotiations. The second-mover advantage suggested by Maaravi and Levy was replicated. We also found that these results were most likely to occur when the buyer who was not knowledgeable about the market price, and expected a price higher than the actual market price. However, when the unknowledgeable buyer expected a lower price than the actual market price, it was advantageous to the knowledgeable seller to move first in the negotiations, otherwise an impasse was more likely to occur.

Source: Journal of Economic Psychology - January 4, 2019 Category: Psychiatry & Psychology Source Type: research