Anchoring in Simulated Competitive Market Negotiation

Abstract

example, framing of outcomes in positive or negative The competitive market simulation (Bazerman, Mag- terms has been shown to affect negotiators perforliozzi, & Neale, 1985) was used to explore anchoring mance and total profit (Bazerman, Magliozzi, & Neale, effects in negotiation. Two possible anchoring effects 1985; Neale & Northcraft, 1986). Other biases, such as were examined in the present study. One effect inundue reliance on readily available information, and volved the profit schedule format; although individual overconfidence in judgment have also been shown to profit schedules for buyers and sellers were norma-tively equivalent, in most previous studies the buyer’s affect negotiators (Neale, 1984; Neale & Bazerman, schedule was presented in decreasing order, whereas 1985). the seller’s schedule was increasing. Anchoring on the One of the cognitive heuristics which extensively af-first number in the profit list would contribute to the fects individual decision making (Tversky & Kahnebuyer’s advantage, often found in this research. The man, 1974; Kahneman, 1992) is termed Anchoring.