The Trap That Skilled Negotiators Miss

Say you walk into a car dealership determined to stay within budget. The salesperson shows you a car you like and quotes a price of $41,435. You know there’s room to negotiate, but when it’s time to counter, that first number quietly takes over. Your counteroffer, the concessions, and the final deal all end up orbiting around $41,435.

That’s anchoring at work. In negotiations, first offers become psychological reference points, and people often fail to adjust far enough away from them, even though they are free to counter with any amount they want.

Although the anchoring effect is well documented, what makes this bias so frustrating is that it persists even among skilled and experienced negotiators. It shows up in procurement, strategic deals, and executive compensation conversations — any situation in which one party gets a number on the table early and the other party must respond under time pressure.

If you’re preparing for an important negotiation, the standard advice is familiar: Do your homework, know your target, and don’t reveal too much too soon. Those suggestions are useful, but none of them changes the fact that when the first offer lands, your mind starts thinking of counteroffers close to that number. Our recent research, published in the Journal of Experimental Social Psychology, identified a simple way to reduce the anchoring effect when you don’t control the first offer: Adopt a choice mindset right when you see the first offer.

The Power of Choice Reminders

A choice mindset is a state of mind in which people perceive the availability of more choices than they are presented with. When in this mindset, people are more likely to recognize the options available to them, including nonobvious options (such as delaying a decision or changing the structure of a deal), particularly in situations in which they feel constrained (such as difficult negotiations).

In everyday life, a choice mindset is the difference between thinking “I have no choice; I have to take what I can get” and thinking “I have choices and can even consider options that have not been presented to me.” The key insight is that feeling constrained is not the same as being constrained, and the subjective perception of choice can be nudged.