Negotiation: should you name your price first?
In a negotiation, letting the other party name a figure often seems prudent. The managerial question is more precise: under what conditions does making the first offer provide an advantage, and what preparation helps negotiators resist the influence of the other party’s opening figure?
What the literature establishes
Adam Galinsky and Thomas Mussweiler (2001, Journal of Personality and Social Psychology) show, in experimental negotiations, that first offers act as anchors and that the negotiators making them generally achieve more favourable outcomes. The opening figure therefore does more than convey a proposal: it can guide subsequent adjustments. In their experiments, however, this advantage disappears when recipients focus on information inconsistent with the anchor, including the other party’s alternatives or their own target.
Understanding interests rather than guessing a figure
Adam Galinsky, William Maddux, Debra Gilin and Judith White (2008, Psychological Science) distinguish perspective taking, which involves considering the situation from another person’s viewpoint, from empathy, which focuses more on their feelings. In their experiments, perspective taking notably helps negotiators discover possible agreements and mutually beneficial trade-offs. Preparing to communicate therefore means more than choosing a figure: it also requires identifying what the other party values and what restricts their choices.
The hasty conclusion
One might conclude that negotiators should always speak first and name an ambitious figure. These studies do not justify such a rule irrespective of the information available and the structure of the negotiation. A first offer is a potential lever, not a substitute for analysing interests, alternatives and acceptable limits. (our executive and employee training programmes)
What the evidence cannot guarantee
These findings come from experimental settings: they do not guarantee the same effect in ongoing commercial relationships subject to regulatory obligations or institutional mandates. In Genève, negotiating private banking fees, a partnership between international organisations, distribution terms for luxury watches or a commodity trading contract involves different constraints. The immediate economic outcome is therefore insufficient to assess either the quality of communication or the robustness of the agreement.
A practical check in Genève
Within SHR’s “Communication” programme, one possible check would use simulations tailored to these sectors, alternating usual preparation with preparation that explicitly identifies the negotiator’s own target, alternatives and assumptions about the other party’s constraints. The first-offer role should be distributed across both conditions, with each role’s acceptable limits recorded confidentially before the exchange. Participants can then compare the proportion of simulations producing an agreement that respects both parties’ limits, also reporting failures to agree. This indicator checks an outcome within the exercise without claiming to demonstrate an equivalent effect on real contracts. To go further: explore the Communication training in Geneva, or browse our executive and employee training programmes in Switzerland.
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