How Can This Price – Particularly Its Specificity – Earn You More Money?

Across several types of price negotiations (e.g., for jewelry, coffee vendors, textbook reselling, etc.), researchers found that when sellers or buyers initiated negotiations with more precise prices (e.g., $19 or $21) than round prices (e.g., $20), the recipients’ counter-offers were adjusted less in response to more precise initial offers. In other words, more precise initial offers yielded counter-offers and final sale prices nearer to the amount of the initial offer. This phenomenon was at least partly due to the recipient perceiving the initial price to more credibly reflect the true value of the product. Suggested Action: When negotiating price, consider being first in the negotiation and offer a precise amount versus an imprecise, rounded amount.