On 8 March at 12:00 in room 2628-303, there will be an OSA seminar by Peter Kesting entitled:

“What is Your Best Price?” – An Experimental Study of an Alternative Negotiation Opening 

Abstract
Much attention in negotiation research has been devoted to the first offer. Rightly so, as there is strong empirical evidence that the first offer has a significant impact on the negotiated outcome and is therefore highly relevant for negotiation scholars and practitioners. Consequently, scholars typically recommend making the first offer. However, in the field, we observe an alternative opening tactic—asking for the best price that the counterpart is willing to accept. This question represents a real alternative to making the first offer because it also initiates the discussion about specific settlement proposals, provided the counterpart answers it. But does it really lead to the other side making a better offer and what is its impact on the economic and relational outcomes of the negotiation? Is it advisable to use this tactic in negotiations? We investigated these questions based on a controlled laboratory experiment, where 227 dyads of buyers and sellers of a smartphone negotiated synchronously via a text chat. We found that the question about the best price indeed has an impact, not just on the first offer, but also on the negotiation outcome. Furthermore, the effect was reduced if more information on list prices was available. These findings suggest rethinking the traditional view of the offer-counter-offer sequence and provide an alternative opening tactic to making the first offer, in the case of high information asymmetry.

Everyone is welcome!