A used car dealer always makes the first offer because she discovered the final negotiated price stays close to that number. What has she discovered that most buyers use

Question

Quizplus · Accepted Answer

The dealer has discovered the anchoring and adjustment heuristic, which is when people use an initial number (the anchor) as a starting point and then adjust their offer based on that number. The dealer knows that if she starts with a high initial price, the buyer will adjust their offer downwards, but if she starts with a lower initial price, the buyer will adjust their offer upwards, resulting in a final negotiated price that is close to her initial offer.

A Used Car Dealer Always Makes the First Offer Because