When you’re ordering your new Audi S6, do you tell the dealer $95,000, or $94,495? Go with the second option. According to research published in a forthcoming issue of the Journal of Experimental Social Psychology, you’re likely to get better value.
Researchers at Colombia’s Business School analysed how over a thousand negotiators performed in fictitious situations—from buying jewellery to buying used car. They found that negotiators who used precise amounts instead of rounded-off ballpark figures tended to be the most successful.
The study concludes that those who use precise amounts in their offers are creating the illusion that they’ve done their research and appear better informed about their object’s true value.
Of course, we can think of an even more effective way to appear informed: actually do your research and simply be informed.