Winning a battle but losing the war: On the drawbacks of using the anchoring tactic in distributive negotiations

Abstract

AbstractIn two experiments, we explored the possible drawbacks of applying the anchoring tactic in a negotiation context. In Study 1, buyers who used the anchoring tactic made higher profits, but their counterparts thought their own results were worse than expected and thus were less willing to engage in future negotiations with them. Study 2 showed that using the anchoring tactic in a market decreased accumulated profits by increasing the rate of impasses and prolonging the negotiations. The implications of these findings are discussed.