Adversarial Anchoring in Bargaining

A low opening offer is a common advice given to bargainers trying to achieve a low price. Such low offers can lead to low prices through different mechanisms. It can signal that you are a tough negotiator, it can commit you to a hard-nosed strategy, or it can anchor your opponent on a low number. In this project we try to distinguish between these effects, focusing on anchoring. Anchoring is one of the most well-established psychological mechanisms: if people consider a high number they will provide higher estimates and valuations in a range of situations. However, would anchoring work if the anchor is provided by a person with opposing interests? There is no direct evidence for such adversarial anchoring in bargaining, where, as discussed, many different mechanisms can affect strategies simultaneously, nor in other settings. In our experiment we present proposers in an ultimatum bargaining setting with a signal that is either randomly determined (an anchor), or chosen by a bargaining counterpart or relevant third party, with or without private information. Signals are found to affect offers in similar ways in all treatments. This provides strong support for adversarial anchoring, and no evidence for any other mechanism. Additionally, we find that people's tendency to be anchored in the bargaining task is correlated with their tendency to be anchored in an individual incentivised estimation task