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Anchoring In Negotiations In India
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Anchoring In Negotiations In India

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Anchoring In Negotiations In India Anchoring In Negotiations In India Presentation Transcript

  • Anchoring & first offers in Negotiations in India
  • Anchoring is a phenomenon observed in negotiations
  • In making an offer in a negotiation, people often start with some initial value in their mind ( an anchor) and adjust from this anchor to make a final estimate
  • Mental math in negotiations Anchor Add or subtract Adjustment
  • Anchors can be set internally or externally
  • Internal Anchors
    • First offer
  • External Anchors
    • Past experience
    • Market information
  • My experiment: The island of Dinna Cay in Bahamas listed for sale on private islands online at a price of $795,000
  • 132 business professionals were split in 3 groups In Delhi, Chennai, Bengaluru, Mumbai
  • Each group got a different asking price for the island
    • Actual Price Online $795,000
    • Mark up Price $1,033,500
    • Mark down Price $556,000
  • They were asked to negotiate by using written quotes Each person got a chance to submit 2 quotes
  • In uncertain negotiations the final deal price usually comes close to the Anchor. If you set the anchor you end up controlling the deal even before negotiation starts My hypothesis
  • Bid Spread for Mark Down Price
  • Bid Spread for Mark Up Price
  • Bid Spread for True Price
  • Hypothesis seen to be confirmed in bid spreads across Indian Cities: the first offer sets the anchor for the final deal price in most of the cases Data for Gujrat, West Bengal to be included in a few months
  • To Know More
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      • 991-080-5964
      • 011-4141-7675
    • Mail us at [email_address]
    To Know More