IDEAS home Printed from https://ideas.repec.org/a/eee/joepsy/v75y2019ipas0167487018302642.html
   My bibliography  Save this article

“When your anchor sinks your boat”: A replication and extension study

Author

Listed:
  • Jiang, Cheng-Ming
  • Ma, Jia-Tao

Abstract

Most of the literature on behavioral decision-making suggests the presence of a first-mover advantage in negotiations, and this is based on the anchoring heuristic. Maaravi and Levy (2017) recently demonstrated a second-mover advantage in distributive situations, in which one party has information about the market value while the other does not. Because this finding contradicts most of the previous literature, we replicated their Studies 3 and 4, in which the seller had information about the market value while the buyer did not. Our Study 1 asked both the seller and the buyer to move first and provide their offer, and our Study 2 asked participants to role-play actual negotiations. The second-mover advantage suggested by Maaravi and Levy was replicated. We also found that these results were most likely to occur when the buyer who was not knowledgeable about the market price, and expected a price higher than the actual market price. However, when the unknowledgeable buyer expected a lower price than the actual market price, it was advantageous to the knowledgeable seller to move first in the negotiations, otherwise an impasse was more likely to occur.

Suggested Citation

  • Jiang, Cheng-Ming & Ma, Jia-Tao, 2019. "“When your anchor sinks your boat”: A replication and extension study," Journal of Economic Psychology, Elsevier, vol. 75(PA).
    • Handle: RePEc:eee:joepsy:v:75:y:2019:i:pa:s0167487018302642
    DOI: 10.1016/j.joep.2019.01.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167487018302642
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.joep.2019.01.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. repec:cup:judgdm:v:9:y:2014:i:6:p:548-557 is not listed on IDEAS
    2. repec:cup:judgdm:v:12:y:2017:i:5:p:420-429 is not listed on IDEAS
    3. Furnham, Adrian & Boo, Hua Chu, 2011. "A literature review of the anchoring effect," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(1), pages 35-42, February.
    4. Ashleigh Shelby Rosette & Shirli Kopelman & JeAnna Lanza Abbott, 2014. "Good Grief! Anxiety Sours the Economic Benefits of First Offers," Group Decision and Negotiation, Springer, vol. 23(3), pages 629-647, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lei Zhou & Nan Liu & Ya-Qiong Liao & Ai-Mei Li, 2021. "Risky choice framing with various problem descriptions: A replication and extension study," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 16(2), pages 394-421, March.
    2. Vrânceanu Diana-Maria & Țuclea Claudia-Elena & Țigu Gabriela, 2020. "Price search behaviour in digital markets – A perspective from Romania," Management & Marketing, Sciendo, vol. 15(2), pages 219-235, June.
    3. repec:cup:judgdm:v:16:y:2021:i:2:p:394-421 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yossi Maaravi & Aharon Levy, 2017. "When your anchor sinks your boat: Information asymmetry in distributive negotiations and the disadvantage of making the first offer," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 12(5), pages 420-429, September.
    2. Wolfram E. Lipp & Remigiusz Smolinski & Peter Kesting, 2023. "Beyond the First Offer: Decoding Negotiation Openings and Their Impact on Economic and Subjective Outcomes," Group Decision and Negotiation, Springer, vol. 32(2), pages 395-433, April.
    3. repec:cup:judgdm:v:12:y:2017:i:5:p:420-429 is not listed on IDEAS
    4. Labro, Eva & Lang, Mark & Omartian, James D., 2023. "Predictive analytics and centralization of authority," Journal of Accounting and Economics, Elsevier, vol. 75(1).
    5. Ivanova-Stenzel, Radosveta & Seres, Gyula, 2021. "Are strategies anchored?," European Economic Review, Elsevier, vol. 135(C).
    6. Sang-June Park & Youjae Yi, 2016. "Performance-only measures vs. performance-expectation measures of service quality," The Service Industries Journal, Taylor & Francis Journals, vol. 36(15-16), pages 741-756, December.
    7. Edwards, Chase J. & Bendickson, Joshua S. & Baker, Brent L. & Solomon, Shelby J., 2020. "Entrepreneurship within the history of marketing," Journal of Business Research, Elsevier, vol. 108(C), pages 259-267.
    8. Eva Labro & Mark Lang & Jim Omartian, 2019. "Predictive Analytics and Organizational Architecture: Plant-Level Evidence from Census Data," Working Papers 19-02, Center for Economic Studies, U.S. Census Bureau.
    9. Yang, Guang & Huang, Ruixian & Shi, Yukun & Jia, Zhehao, 2021. "Does a CEO's private reputation impede corporate governance?," Economic Modelling, Elsevier, vol. 104(C).
    10. Alistair Munro & Marieta Valente, 2016. "Green Goods: Are They Good or Bad News for the Environment? Evidence from a Laboratory Experiment on Impure Public Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(2), pages 317-335, October.
    11. Papyrakis, Elissaios & Parcero, Osiris Jorge, 2022. "The psychology of mineral wealth: Empirical evidence from Kazakhstan," Resources Policy, Elsevier, vol. 77(C).
    12. Jetter, Michael & Walker, Jay K., 2017. "Anchoring in financial decision-making: Evidence from Jeopardy!," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 164-176.
    13. Bastian Schulz, 2023. "Behavioral Finance and how its Behavioral Biases Affect German Investors," ACTA VSFS, University of Finance and Administration, vol. 17(1), pages 39-59.
    14. Siddiqi, Hammad, 2015. "Relative Risk Perception and the Puzzle of Covered Call writing," MPRA Paper 62763, University Library of Munich, Germany.
    15. Davood Bayat & Hadi Mohamadpour & Huihua Fang & Pengfei Xu & Frank Krueger, 2023. "The Impact of Order Effects on the Framing of Trust and Reciprocity Behaviors," Games, MDPI, vol. 14(2), pages 1-14, February.
    16. Catherine Roux & Christian Thöni, 2015. "Do control questions influence behavior in experiments?," Experimental Economics, Springer;Economic Science Association, vol. 18(2), pages 185-194, June.
    17. Teglio, Andrea & Catalano, Michele & Petrovic, Marko, 2014. "Myopic households on a stable path: the neoclassical growth model with rule-based expectations," MPRA Paper 120253, University Library of Munich, Germany.
    18. Joel Rudin & Jooh Lee, 2021. "The Impact of Corporate Reputation Ratings on CEO Compensation Under Diverse Economic Conditions," Corporate Reputation Review, Palgrave Macmillan, vol. 24(3), pages 117-127, August.
    19. Thomas Görzen & Dennis Kundisch, 2019. "When in Doubt Follow the Crowd: How Idea Quality Moderates the Effect of an Anchor on Idea Evaluation," Working Papers Dissertations 57, Paderborn University, Faculty of Business Administration and Economics.
    20. Giacoletti, Marco & Parsons, Christopher A., 2022. "Peak-Bust rental spreads," Journal of Financial Economics, Elsevier, vol. 143(1), pages 504-526.
    21. Dean Gatzlaff & Peng Liu, 2013. "List Price Information in the Negotiation of Commercial Real Estate Transactions: Is Silence Golden?," The Journal of Real Estate Finance and Economics, Springer, vol. 47(4), pages 760-786, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:75:y:2019:i:pa:s0167487018302642. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/joep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.