If someone starts a negotiation with a very high or low price to try and set your mind, what is a smart way to get the talk back to a fair place?

When a negotiator begins with an extremely high or low price, they are employing a psychological tactic known as the anchoring effect. This means they are attempting to establish an initial reference point, or 'anchor,' in your mind, which then influences your perception of all subsequent offers and the plausible range for the final agreement. Their objective is to manipulate your perception of value towards their extreme position, making any later concessions they offer appear more substantial and reasonable than they actually are. This tactic aims to shift the perceived negotiation range in their favor. A smart way to regain control and guide the discussion back to a fair place involves several strategies.

Firstly, avoid reacting emotionally or directly legitimizing their extreme anchor. Engaging with it as a valid starting point can inadvertently reinforce its influence. Instead, you should immediately re-anchor the negotiation with a credible and well-justified counter-offer or a realistic price range. This involves confidently stating your own desired price or value and providing the rationale behind it, thereby establishing a new, more reasonable reference point for the discussion. For example, if a seller quotes an excessively high price for a service, you would present your own researched and justified price range, explaining why that range is appropriate based on market standards, rather than simply dismissing their high quote.

Secondly, shift the discussion to objective criteria. These are external, independent standards of fairness or value that are not based on personal opinion or subjective desire. Examples of objective criteria include market rates, industry benchmarks, cost of production, comparable sales data, expert appraisals, or standardized pricing models. By focusing on these verifiable facts, you move the conversation away from subjective demands and towards a rational assessment of true value. You might ask, "Based on the average market rate for similar services, which is typically X to Y, could you explain how your proposed price aligns with that benchmark?"

Thirdly, understanding and referencing your BATNA (Best Alternative To a Negotiated Agreement) is crucial. Your BATNA is the most advantageous course of action you can take if you fail to reach an agreement in the current negotiation. Knowing your BATNA provides you with power because it clearly defines your walk-away point and establishes a factual basis for what you consider acceptable, independent of the other party's extreme anchor. If you have a strong BATNA, you can confidently reject unreasonable offers and demonstrate that you are not dependent on this specific deal, thereby compelling the other party to be more realistic.

Fourthly, ask clarifying questions about their extreme offer. By inquiring, "Could you elaborate on the specific factors that led you to propose that particular price?" or "What assumptions are you making that result in that valuation?", you compel the other party to justify their extreme position. This process often exposes the subjective or unsubstantiated nature of their anchor, allowing you to address their underlying reasoning or constraints rather than simply their number. This shifts the focus from the anchor itself to its justification.

Finally, confidently presenting your own well-justified position or range early in the discussion, supported by objective criteria and your BATNA, helps to pull the negotiation back towards a realistic middle ground. By consistently referencing fair value and your alternatives, you effectively diminish the impact of their initial extreme anchor and guide the discussion towards a more equitable and mutually acceptable outcome.