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vtry on Aug 3, 2012 | parent | context | favorite | on: Start high in negotiations and low in auctions

starting prices are a form of 'anchor' - a piece of information which is known to affect subsequent decisions. As the authors note, anchoring has a powerful influence on our reasoning:

vtry on Aug 3, 2012 [–]

It also turns out that, contrary to conventional wisdom, making the first offer is also a good strategy:

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