The anchor in negotiations is one of the basic negotiation concepts.

Anchor is the first offer in negotiations, the starting point for further talks.

It is important because it shapes the expectations of the other party, especially when that party does not have enough data and is not sure about the amount of the offer it should submit. The anchor then helps her to situate her expectations.

What’s more, research has shown that the anchor has a significant impact on the final outcome of negotiations. The final agreement (in financial terms) usually oscillates around an anchor.

One of the basic rules of negotiating is “never make your offer first”. It is based on the assumption that if the other party submits its offer before us, we will gain knowledge about its expectations and, to some extent, possibilities.

However, it turns out that in practice it is not so simple. Anchoring the offer (providing your position first) gives us some profits. They are important especially in a situation where the other party is not sure what the appropriate level of the offer should look like. Our anchor will suggest the level around which the negotiations will be focused. It should be remembered that usually the anchor has a significant impact on the final outcome of the negotiations.

Therefore, it cannot be unequivocally declared that submitting an offer first is unfavorable for the outcome of the negotiations on our side, on the contrary, it may have a positive impact on the final outcome of the negotiations. Bidding first is recommended when you have enough information about the other party’s financial capabilities (RV) and can set the negotiation space (ZOPA). In this case, placing bids first can only help you.

One should only remember that our offer (anchor in negotiations) should be within reason. Let’s demand more than we want to get, but let’s stick to the ground. Submitting a strongly overstated or even completely inadequate offer may simply discourage the other party to negotiations. He will treat us as someone frivolous and leave the table before we can start negotiating.

If you do not have enough information about the motives and financial possibilities of the other party, it is better to wait for the offer. You do not want to demand too little, because as a result of negotiations you will not get as much as you could finally get without betraying your lowered expectations. Nor do you intend to offend the other party and discourage them from negotiating by asking too much.

Source:https://poradniknegocjatora.pl/kotwica-w-negocjacjach/

Supported by Norway through Norway Grants 2014-2021, in the frame of the Programme “Social Dialogue – Decent Work”.