Psychological

Highball/Lowball

What it is

Opening with an extreme offer to anchor the negotiation range in your favor.

How it works

The first number in a negotiation sets the anchor. A seller starting extremely high (highball) or a buyer starting extremely low (lowball) shifts the entire zone of possible agreement. Even though both parties know the opening offer is unreasonable, it still psychologically anchors subsequent discussion around that number.

Real-world examples

  • •A used car seller pricing a $10,000 car at $18,000, expecting to "negotiate down" to $14,000.
  • •A job candidate requesting a salary 40% above market rate to anchor negotiations higher.
  • •A plaintiff demanding $10 million in a lawsuit worth $1 million to shift the settlement range.

Ethical guidelines

  • ●Extreme opening offers are standard negotiation practice but can shade into bad faith.
  • ●The line between aggressive anchoring and dishonest pricing depends on context and norms.
  • ●Opening offers so extreme they insult the counterparty can destroy negotiations.

How to defend against it

  • ►Always research independent benchmarks before entering any negotiation.
  • ►Counter an extreme anchor with your own extreme counter-anchor to rebalance the range.
  • ►Ignore the opening offer entirely and state what you believe the fair value is with evidence.

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