Article · ~7 min read

Price Anchoring 101

Program on Negotiation, Harvard Law School Free Beginner

This explains the actual mechanism behind starting higher than feels comfortable: whoever names a number first shapes the entire rest of the negotiation, even when that number is somewhat arbitrary. It is written for negotiators generally, not founders specifically, but the research it cites is the reason anchoring works at all. Read it to understand why the number you say first matters more than you think.

• The first number named in a conversation anchors everything that follows, even if it is somewhat arbitrary.
• Making the first offer generally produces a better outcome than waiting for the other side to name a number.
• An anchor set too far outside a credible range damages trust rather than helping you.