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No Numbers Needed - The Semantic Anchoring Effect
Keywords: negotiation, first offer, anchoring, semantic anchor, uncertainty, framing
Abstract: Anchoring exemplifies one of the most important and most studied behavioral negotiation strategies in research. Existing studies thus far focus exclusively on numerical first offers. However, situations arise in which a party wants to benefit from the first-mover advantage (which promises a better outcome for the anchoring party), but simultaneously—due to uncertainty, for example—cannot or does not want to reveal numbers. In such a situation, the party can rather use price directions and say, for example, that prices have risen since the previous year. This paper studies if and how semantic anchors, which do not incorporate numbers, influence the negotiation process and outcome. For this purpose, three studies were undertaken. The first two studies show the semantic anchoring effect in a scenario-based questionnaire. In a third study, a negotiation experiment is conducted, which discloses that the semantic anchor leads to better outcomes than a numerical anchor.