To Anchor a Negotiation, Two Points May Be Better Than One

Phong6698 | flickr

When you’re at the negotiating table — whether you’re bargaining with a freelancer for an upcoming project or negotiating with a venue for your wedding — a time will almost inevitably come when it’s your turn to put an offer on the table. Do you throw out an aggressive number, aiming to anchor your counterpart but hopefully not drive them away? Do you offer a more modest point and hope they’ll be reasonable in return? Some negotiators consider another possibility: offering not just a single number, but a range. For years, the prevailing wisdom was that range offers were a bad idea, but our recent research has convinced us otherwise. In some cases, putting a range on the table can be a smart move.

Take the case of a salary negotiation. If you wanted to ask for, say, $60,000, for years our advice would have been: don’t ask for “$55,000 to $60,000” or even “$58,000 to $63,000.” All the person on the other end, like an HR representative, would hear is the lower number. And following that logic, there would be no point asking for “$60,000 to $65,000.” Such a request would be equivalent to asking for $60,000. This “selective attention” perspective, the notion that negotiators focus exclusively on the elements of an offer that suit their needs, is what we used to believe — and what negotiation teachers and textbooks have counseled for decades. But we’re now convinced that this view is at least partly wrong.

Earlier work that one of us (Daniel) did with Abbie Wazlawek, a doctoral candidate in management at Columbia Business School, showed that range offers are a surprisingly common tactic used by more than half of participants in a survey on recent real-world negotiations. Inspired by this, and by our negotiation students repeatedly asking us whether range offers worked, we set out to document the folly of this approach — and ended up surprised by the benefits certain kinds of range offers can have.

To describe these benefits, we first need to distinguish between three different kinds of range offers based on the position of the range relative to a point offer — the offer you would have made if you’d given only a single figure. A first kind: back-down ranges, which start at the point offer and ease into a more accommodating number (lower if the offer-maker is a seller, like a job candidate, and higher if the offer-maker is a buyer, like a hiring manager). Second: bracketing ranges, which straddle the point offer, reaching both above and below it. Lastly: bolstering ranges, which begin at the point offer and stretch in a more ambitious direction (above the point if the offer-maker is a seller).

Through a series of five studies, we found that negotiators who opened with range offers were viewed just as positively by their counterparts, and in some cases more so, than those who opened with a point offer. We also found that those who opened with a bolstering range ended up securing higher final settlement prices than those who opened with point offers or other kinds of range offers. Counter to earlier assumptions, we’ve concluded that both ends of a range offer shape offer-recipients’ perceptions about what a reasonable outcome might look like, and bolstering ranges can pull final settlements in a direction that favors the offer-maker.

In other words, that “selective attention” story we’d been telling for years doesn’t fit the data. People on the receiving end of range offers don’t hear just the number at the end of the range that’s attractive to them — both numbers have an effect. Or to put it another way: ranges can work. And one reason is because they shape offer-recipients’ views of the offer-maker’s limits.

relational and deal outcomes for range offers vs. point offers

We also found that bolstering ranges outperformed point offers for a second reason: those receiving bolstering range offers thought it would be rude to respond aggressively and thus often countered with a less assertive price than those who received point offers. Rejecting a counterpart’s initial point offer may seem like an inevitable part of the “game” of bargaining, but responding to a range offer with a value well outside the range may feel disrespectful. While politeness certainly doesn’t govern all negotiations, it’s more common and powerful than some cynical accounts of negotiation might suggest. Even in competitive interactions, people often care about giving and receiving displays of respect and politeness.

But wouldn’t people just be better off simply asking for more, throwing out a single, more assertive number rather than messing around with a range? It’s a sensible question, one we ourselves had asked in the past. So, in a final study, we compared bolstering range offers with “bumped-up” point offers — asking for a single number that was more ambitious than the negotiator’s initial plan, like asking for $70,000 for a job that usually pays $60,000. We found that while bolstering ranges yielded better deals than basic point offers, these “bumped-up” offers did not. In this case, simply asking for more didn’t lead to getting more. Worse, these more ambitious point offers showed a significant downside: those using them reached an impasse with their counterparts nearly twice as often.

So what’s our best state-of-the-art advice, given our research? Whether you’re haggling with a freelancer, bargaining for a wedding venue, or negotiating your own salary, our first recommendation is: don’t use backdown ranges. In a pilot study we found that a third of people spontaneously constructed backdown ranges when asked to make a range offer. But our studies showed that backdown ranges frequently lose value and show no relationship benefits beyond point offers or bracketing range offers. In a salary negotiation, if you are tempted to ask for $60,000, don’t ask for $55,000 to $60,000.

Our research also identifies some cases where range offers may be most likely to work: when your range starts at a moderate rather than extreme point (asking for $75,000 to $80,000 for a job that normally pays around $60,000 is unlikely to work) and when your range has a modest rather than extreme width (asking for $60,000 to $90,000 may cost you some credibility). We also believe that the relationship context matters: a range offer may have a stronger effect with a counterpart who has at least some motivation to be reasonable and polite.

The choice between bracketing and bolstering range offers depends in part on your goals. If your priority is cultivating a good impression, you might consider a relatively narrow bracketing range that surrounds your point (such as $58,000 to $63,000 in the salary example). If your priority is getting the best possible deal, you could raise your sights, perhaps 5-15%, to anchor the high end of a bolstering range offer (such as $60,000 to $65,000).

Based on these findings, we now take a different approach to teaching about range offers. Across a variety of bargaining contexts, we counsel our students to consider bolstering and bracketing range offers. Especially for people who tend to be more accommodating, these approaches can be a way asking for and claiming more value while still conveying a sense of reasonableness. Sometimes, the best number you can put on the table may actually be two. 

About the researcher

Daniel Ames

Professor Ames's research focuses on social judgment and behavior. He examines how people judge themselves as well as the individuals and groups around...

Read more.

About the researcher

Malia Mason

Malia Mason studies negotiations and social judgment and decision making in one line of work. In a second, she studies how people regulate their...

Read more.
articles by Topic