Opening Positions and Anchoring

The First Number Wins

Two identical houses went on the market in the same neighborhood. House A was listed at $420,000. House B was listed at $380,000. Both houses were worth approximately $400,000. House A sold for $405,000 after negotiation. House B sold for $375,000. The only difference was the anchor.

By the end of this lesson, you’ll understand anchoring psychology and know exactly when and how to set the first number in any negotiation.

🔄 Quick Recall: In the previous lesson, we built a preparation framework with five steps. Can you recall the three numbers in your negotiation range? (Anchor, target, and reservation price.) Today we focus on that anchor—the most powerful number in any negotiation.

The Science of Anchoring

The anchoring effect is one of the most robust findings in behavioral economics. Tversky and Kahneman demonstrated that even completely random numbers influence subsequent estimates. In one famous study, spinning a wheel to generate a random number influenced people’s guesses about the percentage of African countries in the United Nations.

In negotiation, anchoring is even more powerful because the numbers aren’t random—they’re presented with justification. The first offer sets the psychological range within which all subsequent bargaining happens.

Key finding: Research on negotiation outcomes consistently shows that final agreements correlate more strongly with the first offer than with any other single variable.

When to Anchor First

Anchor first when:

• You’ve done thorough research and know the fair range
• You’re confident in your preparation
• You want to set the frame of the negotiation
• The other party is less prepared than you

Let them anchor first when:

• You’re uncertain about the fair range
• The other party has significantly more market knowledge
• You suspect their offer might be more generous than your planned anchor
• You want to gather information from their opening

✅ Quick Check: You’re negotiating a consulting project but have no idea what the client typically pays. Should you anchor first or let them? Why?

Setting an Effective Anchor

An effective anchor has three properties:

1. Ambitious. It should be better than your target. If your target salary is $95,000, your anchor might be $110,000. This gives you room to negotiate toward your target while making the other party feel they’ve achieved concessions.

2. Justifiable. Every anchor must be supported by objective reasons. “I’m asking $110,000 because the market median for this role in this city with my experience level is $105,000, and I bring [specific additional value].”

3. Precise. Research shows that precise numbers ($107,500) are perceived as more researched and knowledgeable than round numbers ($110,000). A precise anchor signals that you’ve done your homework.

I'm negotiating [what] with [who].
My target outcome: [number/terms]
My BATNA supports a reservation price of: [number]

Help me craft an anchor that is:
1. Ambitious (25-35% above my target)
2. Supported by 3 objective justifications
3. Precise (not a round number)

Also suggest how I should present it verbally—
the exact words I'd use.

Defending Against Their Anchor

If the other party anchors first, you need a counter-strategy:

1. Don’t react emotionally. A high (or low) anchor is a tactic, not an insult. Stay neutral.

2. Don’t counter-anchor immediately. First, ask questions: “How did you arrive at that number?” Their justification reveals their logic and potentially their flexibility.

3. Re-anchor with your own prepared number. Don’t adjust from their anchor—present your own anchor with its own justification. “Based on my research, a fair range would be…” This resets the psychological reference point.

4. Use the flinch. A visible reaction of surprise (a brief pause, a slight head tilt, or a neutral “hmm”) signals that their number is far from expectations without being adversarial.

The other party has opened with [their anchor].
My target is [my target].
My research suggests a fair range of [range].

Help me:
1. Draft 3 questions to probe their anchor
2. Prepare my counter-anchor with justification
3. Write a response script that re-anchors
   without being confrontational

✅ Quick Check: If someone anchors with a salary offer of $65,000 and your target is $90,000, what’s your immediate response? Walk through the counter-anchoring steps.

The Concession Pattern

After anchors are set, negotiation becomes a series of concessions. How you make concessions matters as much as the concessions themselves.

Rules for concessions:

1. Never make a concession without getting one. “I can come down on price if you can extend the payment terms.”
2. Make concessions smaller over time. First move: $5,000. Second: $2,000. Third: $500. Diminishing concessions signal you’re approaching your limit.
3. Never split the difference when asked. “Meet in the middle” sounds fair but disproportionately benefits whoever anchored more aggressively.
4. Label your concessions. Don’t just change your number—explain what you’re giving up. “I’m willing to reduce the project fee by $2,000, which means I’ll complete it with one fewer revision round.”

The Power of Silence After an Offer

After you make an offer, stop talking. The most common negotiation mistake is making an offer and then immediately weakening it by adding justifications, alternatives, or nervous chatter.

“I’m looking for $95,000.” [SILENCE]

Not: “I’m looking for $95,000, but I’m flexible, and I understand budgets are tight, and I’d consider less if the benefits are good…”

Silence creates psychological pressure on the other party to respond. It signals confidence. And it prevents you from negotiating against yourself.

Try It Yourself

Practice anchoring with AI:

Simulate a salary negotiation. You're the hiring
manager. My role is [position] and my experience
is [level]. I'll make the first offer.

After my offer, respond realistically. Push back,
ask questions, and make counter-offers. After 5
exchanges, evaluate:
1. Was my anchor effective?
2. Did I justify it with objective criteria?
3. Did I maintain discipline in my concessions?
4. Where could I improve?

Run this simulation three times with different scenarios. Your anchoring will improve dramatically.

Key Takeaways

• The first number in a negotiation disproportionately influences the final outcome—this is the anchoring effect
• Anchor first when you’re well-prepared; let them anchor when you lack market information
• Effective anchors are ambitious, justified by objective criteria, and precise (not round numbers)
• Counter an opponent’s anchor by questioning it, then re-anchoring with your own justified number
• Make concessions that diminish in size over time, and never concede without getting something in return
• After making an offer, stop talking—silence is your most powerful tool

Up Next

In Lesson 4: Active Listening and Strategic Questions, we’ll master the techniques that reveal what the other party really wants—information that transforms your negotiation from a battle into a collaboration.