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

Cheng-Ming Jiang and Jia-Tao Ma

Journal of Economic Psychology, 2019, vol. 75, issue PA

Abstract: Most 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.

Keywords: Anchoring; Negotiation; Second-mover advantage; Information asymmetry; Replication (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:75:y:2019:i:pa:s0167487018302642

DOI: 10.1016/j.joep.2019.01.001

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