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Precious property or magnificent money? How money salience but not temperature priming affects first-offer anchors in economic transactions

Author

Listed:
  • Leusch, Yannik M.
  • Loschelder, David D.
  • Basso, Frédéric

Abstract

The present study aims for a better understanding of how individuals’ behavior in monetary price negotiations differs from their behavior in bartering situations. Two contrasting hypotheses were derived from endowment theory and current negotiation research to examine whether negotiators are more susceptible to anchoring in price negotiations versus in bartering transactions. In addition, past research found that cues of coldness enhance cognitive control and reduce anchoring effects. We attempted to replicate these coldness findings for price anchors in a distributive negotiations scenario and to illuminate the potential interplay of coldness priming with a price versus bartering manipulation. Participants (N=219) were recruited for a 2 × 2 between-subjects negotiation experiment manipulating (1) monetary focus and (2) temperature priming. Our data show a higher anchoring susceptibility in price negotiations than in bartering transactions. Despite a successful priming manipulation check, coldness priming did not enhance cognitive control (nor interact with the price/bartering manipulation). Our findings improve our theoretical understanding of how the focus on negotiation resources frames economic transactions as either unidirectional or bidirectional, and how this focus shapes parties’ susceptibility for the anchoring bias and negotiation behavior. Implications for theory and practice are discussed.

Suggested Citation

  • Leusch, Yannik M. & Loschelder, David D. & Basso, Frédéric, 2018. "Precious property or magnificent money? How money salience but not temperature priming affects first-offer anchors in economic transactions," LSE Research Online Documents on Economics 88288, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:88288
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    File URL: http://eprints.lse.ac.uk/88288/
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    References listed on IDEAS

    as
    1. Ori Heffetz & John A. List, 2014. "Is The Endowment Effect An Expectations Effect?," Journal of the European Economic Association, European Economic Association, vol. 12(5), pages 1396-1422, October.
    2. Mussweiler, Thomas & Strack, Fritz, 2001. "The Semantics of Anchoring," Organizational Behavior and Human Decision Processes, Elsevier, vol. 86(2), pages 234-255, November.
    3. Kahneman, Daniel, 1992. "Reference points, anchors, norms, and mixed feelings," Organizational Behavior and Human Decision Processes, Elsevier, vol. 51(2), pages 296-312, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    anchoring; loss aversion; resource framing; money; embodiment; temperature priming; Bartering;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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