Situations / Negotiating
Negotiating
Agreeing a price, a deal or terms with someone whose interests differ from yours.
Traps you might be in
- No. 0037 Anchoring BiasThe seller asks $18,000, and you spend the evening deciding how far below that number you can go.
- No. 0326 Endowment EffectYou list your old bike for $300, then realize you wouldn’t pay that much for it yourself.
- No. 0587 Loss AversionYou find $20 in an old coat, then lose $20 on the train and spend the evening thinking about the loss.
Tools to try
Patterns at play
- No. 0018 Adverse SelectionYou turn down another low offer for your well-maintained car because buyers price it like one hiding an expensive fault.
- No. 0630 Moral HazardYour insurance pays the whole repair bill, so you accept the first quote instead of shopping around.
- No. 0769 Principal-Agent ProblemYour adviser recommends a fund, and you discover it pays them more than the cheaper option would.