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Round Off the Bargaining: The Effects of Offer Roundness on Willingness to Accept

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  • Dengfeng Yan
  • Jorge Pena-Marin

Abstract

This research shows that making a precise (vs. round) offer in a negotiation may lead to diverging outcomes. On the one hand, past literature has demonstrated a precision advantage wherein offer precision reduces the amount by which offer recipients counter. On the other hand, building on the notion that round numbers symbolize completion and previous findings that individuals tend to set goals at round numbers, we hypothesize a roundness advantage wherein offer roundness increases the bargainer’s willingness to accept an offer. Five studies provide convergent evidence for our proposition and reconcile the present results with previous findings. We found that participants receiving a round offer are more (less) likely to accept (counter) than those who receive comparable precise offers. However, if they counter, participants in the precise condition counter by a smaller amount than those in the round condition. Furthermore, in agreement with our explanation, we find that the roundness advantage is more likely to manifest when participants subscribe to the association between round numbers and the feeling of completion.

Suggested Citation

  • Dengfeng Yan & Jorge Pena-Marin, 2017. "Round Off the Bargaining: The Effects of Offer Roundness on Willingness to Accept," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 44(2), pages 381-395.
    • Handle: RePEc:oup:jconrs:v:44:y:2017:i:2:p:381-395.
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    File URL: http://hdl.handle.net/10.1093/jcr/ucx046
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    Citations

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    Cited by:

    1. Lee, Alice J. & Loschelder, David D. & Schweinsberg, Martin & Mason, Malia F. & Galinsky, Adam D., 2018. "Too precise to pursue: How precise first offers create barriers-to-entry in negotiations and markets," Organizational Behavior and Human Decision Processes, Elsevier, vol. 148(C), pages 87-100.
    2. Koo, Minjung & Dai, Hengchen & Mai, Ke Michael & Song, Camilla Eunyoung, 2020. "Anticipated temporal landmarks undermine motivation for continued goal pursuit," Organizational Behavior and Human Decision Processes, Elsevier, vol. 161(C), pages 142-157.
    3. Margarita Leib & Nils C. Köbis & Marc Francke & Shaul Shalvi & Marieke Roskes, 2021. "Precision in a Seller’s Market: Round Asking Prices Lead to Higher Counteroffers and Selling Prices," Management Science, INFORMS, vol. 67(2), pages 1048-1055, February.
    4. Maggie Rong Hu & Xiaoyang Li & Yang Shi & Xiaoquan (Michael) Zhang, 2023. "Numerological Heuristics and Credit Risk in Peer-to-Peer Lending," Information Systems Research, INFORMS, vol. 34(4), pages 1744-1760, December.
    5. Santana, Shelle & Thomas, Manoj & Morwitz, Vicki G., 2020. "The Role of Numbers in the Customer Journey," Journal of Retailing, Elsevier, vol. 96(1), pages 138-154.
    6. Kimbrough, Erik O. & Porter, David & Schneider, Mark, 2021. "Reference dependent prices in bargaining: An experimental examination of precise first offers," Journal of Economic Psychology, Elsevier, vol. 86(C).
    7. Dogerlioglu-Demir, Kivilcim & Akpinar, Ezgi & Gurhan-Canli, Zeynep & Koçaş, Cenk, 2022. "Are 1-endings the new 9-endings? An alternative for generating price discount perceptions," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    8. Zhenling Jiang, 2022. "An Empirical Bargaining Model with Left-Digit Bias: A Study on Auto Loan Monthly Payments," Management Science, INFORMS, vol. 68(1), pages 442-465, January.
    9. Mohamed Didi Alaoui, 2020. "L’effet d’adéquation entre la forme de présentation du prix et de la distance temporelle sur les réponses du consommateur : une approche par la théorie des niveaux de représentation," Post-Print hal-02870097, HAL.
    10. Mengdi Wang & Dong Li, 2020. "What motivates audience comments on live streaming platforms?," PLOS ONE, Public Library of Science, vol. 15(4), pages 1-12, April.
    11. (Gina) Cui, Yuanyuan & (Sam) Kim, Seongseop & Kim, Jungkeun, 2021. "Impact of preciseness of price presentation on the magnitude of compromise and decoy effects," Journal of Business Research, Elsevier, vol. 132(C), pages 641-652.
    12. Petrowsky, Hannes M. & Schweinsberg, Martin & Seitz, Lennart & Funk, Burkhardt & Loschelder, David D., 2023. "Deal or no deal? How round vs precise percentage offers and price-ending mimicry affect impasse risk in over 25 million eBay negotiations," Journal of Economic Psychology, Elsevier, vol. 94(C).
    13. Christina Saenger & Veronica L. Thomas, 2021. "How limited consumption experiences affect word of mouth," Marketing Letters, Springer, vol. 32(2), pages 149-163, June.
    14. Converse, Benjamin A. & Dennis, Patrick J., 2018. "The role of “Prominent Numbers” in open numerical judgment: Strained decision makers choose from a limited set of accessible numbers," Organizational Behavior and Human Decision Processes, Elsevier, vol. 147(C), pages 94-107.

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