Initial Offer

Oxcam
 Initial Offer

• You have to increase your ceiling for the demands you ask for because
“Effectiveness at the negotiating table depends upon overstating demands”.
– Due to three main things:
1. It raises the perceived value of what you are offering.
2. It can influence the other part to modify his own Walk Away
Point.
3. If you make a concession it’s only theoretically, but practically
you will seem more cooperative.

Oxcam
• Usually creates an Anchoring Point; therefore,
try to be the first one to do it.

• If TOP makes the Initial Offer first; then you must

«frame» the negotiation [x = (B1 + S1) / 2].

Oxcam
 Anchoring Effect
900

500

S1

- WAPs WAPb +

Zopa

Oxcam
 Framing Effect
900

500

V1

- WAPs WAPb +
x = (S1 + B1)/2
Zopa
500 = (900 + B1)/2
B1 = 100

Oxcam
• Be careful, try not to accept the first offer because it might create
insatisfaction to TOP.

– If you did so, this will raise two points:

• I could have done better,
• Something must be wrong.

Oxcam
 Pros of a Big Initial Offer

•It gives us room to make concessions.

•It sends a metamessage.
•Statistically x = (B1 + S1) / 2

Oxcam
 Cons of a Big Initial Offer

•It can be rejected, and make TOP walk away.

•It communicates toughness.

Oxcam