Perspective taking does not moderate the price precision effect, but indirectly affects counteroffers to asking prices

Margarita Leib, Karin Kee, David D. Loschelder, Marieke Roskes

Research output: Contribution to journalArticlepeer-review

Abstract

Precise asking-prices (e.g., $249,800), compared with round ones (e.g., $250,000), are stronger anchors, leading buyers to counter closer to the asking-price. This ‘precision effect’ is driven by (i) higher evaluation of the seller's competence, and (ii) buyers using a finer-grained numerical scale when the asking-price is precise compared with round. But are buyers more susceptible to precise anchors, the more they take the seller's perspective? If so, what are the underlying mechanisms leading to this increased susceptibility? We examine the potential moderating role of trait (Experiment 1) and manipulated (Experiment 2) perspective-taking on the price precision effect and its underlying mechanisms. We test the prediction that the more buyers take the seller's perspective, the more they will evaluate a precise-opening seller as competent, which in turn will increase buyers' susceptibility to precise prices (H1). We further test two competing predictions regarding the moderating role (H2a) of perspective-taking versus lack thereof (H2b) on buyers' use of a finer-grained numerical scale when countering a precise asking-price. Results revealed that precise asking-prices lead to counteroffers closer to the asking-price. This price precision effect was driven by the scale granularity, but not the perception of seller's competence mechanism. Further, perspective-taking did not moderate the price precision effect. Exploratory analyses revealed that perspective-taking leads to higher perception of seller's competence, which in turn leads to counteroffers that are closer to the asking-price. Overall, both price precision and perspective-taking shape counteroffers (but not in an interaction), making the two factors important in negotiation processes.

Original languageEnglish
Article number104323
JournalJournal of Experimental Social Psychology
Volume101
DOIs
StatePublished - 1 Jul 2022
Externally publishedYes

Keywords

  • Anchoring
  • First offers
  • Negotiations
  • Perspective taking
  • Price precision

ASJC Scopus subject areas

  • Social Psychology
  • Sociology and Political Science

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