Precise offers are potent anchors: Conciliatory counteroffers and attributions of knowledge in negotiations

• People are in the habit of using round prices as first offers in negotiations.
• Precise first offers act as more potent anchors than round first offers.
• Recipients of precise opening offers made more conciliatory counter-offers.
• This effect carried through to final settlements.
• Precise first offers were seen as more informed, prompting smaller adjustments.

People habitually use round prices as first offers in negotiations. We test whether the specificity with which a first offer is expressed has appreciable effects on first-offer recipients' perceptions and strategic choices. Studies 1a–d establish that first-offer recipients make greater counteroffer adjustments to round versus precise offers. Study 2 demonstrates this phenomenon in an interactive, strategic exchange. Study 3 shows that negotiators who make precise first offers are assumed to be more informed than negotiators who make round first offers and that this perception partially mediates the effect of first-offer precision on recipient adjustments. First-offer recipients appear to make assumptions about their counterpart's language choices and infer meanings that are not explicitly conveyed. Precise numerical expressions imply a greater level of knowledge than round expressions and are therefore assumed by recipients to be more informative of the true value of the good being negotiated.