Two professors at Columbia Business School suggest that asking for precise numbers could help negotiators swing deals in their favor.
With the rising cost of living and scarcity of available jobs, salary negotiations have become very important for job seekers. However, two professors at Columbia Business School conducted a new research and have some interesting tips to offer all new job seekers. According to Professors Malia Mason and Daniel Ames and doctoral students Alice Lee and Elizabeth Wiley from Columbia Business School, asking for precise numbers gives job seekers an upper hand while negotiating salary packages.
"What we discovered is there is a big difference in what most people think is a good strategy when negotiating and what research shows is a good strategy," said Professor Mason. "Negotiators should remember that in this case, zero's really do add nothing to the bargaining table."
In fact, the professors state that in any negotiation, asking for a specific and precise dollar amount is always more beneficial than getting rounded-off dollar amount.
For the research, a few negotiators were placed in real life situations where they had to negotiate the price of a used car or jewellery. While some of these negotiators were given specific dollar amounts, others were given rounded-off dollar amounts. For example, $3,000 vs. $3,015.
It was found that the negotiators who were given specific dollar amounts were better informed than the negotiators that were given rounded-off dollar amounts as they knew the exact value of the deal they were looking to make. Hence, negotiators who were given specific dollar amounts were better at negotiating the deal than negotiators that were given rounded-off dollar.
Researchers of the study also state that negotiators who come prepared with specific dollar amounts while looking to strike a deal create an illusion of being well-informed and are more successful in swaying the deal to their benefit.
"The practical application of these findings - signaling that you are informed and using a precise number - can be used in any negotiation situation to imply you've done your homework," Mason concluded.
The paper will be published in the forthcoming issue of Journal of Experimental Social Psychology.
