CPN CPN Anchoring & Framing Strategies 1 — Questions and Answers
Question 1: What is 'anchoring' in negotiation?
- Setting an initial reference point that disproportionately influences subsequent offers and the final outcome (Correct answer)
- Locking in a final agreement so it legally cannot be reopened
- Using written contracts to bind both parties from the outset
- Preventing the other party from making counteroffers
Correct answer: Setting an initial reference point that disproportionately influences subsequent offers and the final outcome
Anchoring establishes an initial figure or position that serves as a psychological reference point, pulling the final outcome toward it.
Question 2: In negotiation, 'framing' refers to:
- Presenting information in a way that shapes how the other party perceives and evaluates it (Correct answer)
- Creating a legal framework and structure for the agreement
- Setting up the physical environment and seating arrangement for negotiations
- Outlining the timeline and agenda before negotiations begin
Correct answer: Presenting information in a way that shapes how the other party perceives and evaluates it
Framing shapes perception by emphasizing gains or losses, which influences how the other party evaluates proposals and makes decisions.
Question 3: According to prospect theory, people are generally:
- More motivated to avoid losses than to achieve equivalent gains (Correct answer)
- Equally motivated by gains and losses of the same size
- More motivated by potential gains than by potential losses
- Indifferent to how options are framed as gains or losses
Correct answer: More motivated to avoid losses than to achieve equivalent gains
Prospect theory demonstrates that losses loom psychologically larger than equivalent gains, making loss framing a powerful negotiation tool.
Question 4: A 'gain frame' presents an offer by emphasizing:
- What the other party stands to benefit from accepting the proposal (Correct answer)
- What you are personally willing to sacrifice if no deal is reached
- The total market value of the deal to establish legitimacy
- A guaranteed fixed outcome regardless of external conditions
Correct answer: What the other party stands to benefit from accepting the proposal
A gain frame highlights the positive benefits the other party receives, making the offer feel more attractive and worth accepting.
Question 5: What is a 'loss frame' in negotiation?
- Emphasizing what the other party will lose or miss out on if they do not accept the offer (Correct answer)
- Presenting your total financial exposure if the negotiation fails
- Framing the negotiation explicitly as a zero-sum competition
- Accepting a financial loss to preserve the long-term relationship
Correct answer: Emphasizing what the other party will lose or miss out on if they do not accept the offer
A loss frame exploits loss aversion by highlighting the negative consequences of rejecting the offer, motivating acceptance.
Question 6: Which approach best counters an anchor set by the other party?
- Ignore it and immediately introduce your own strong counter-anchor (Correct answer)
- Accept it as the starting point and negotiate incrementally from there
- Immediately leave the negotiation to signal the anchor is unacceptable
- Ask for a recess and return after the anchor's impact has faded
Correct answer: Ignore it and immediately introduce your own strong counter-anchor
The most effective counter to anchoring is introducing a strong counter-anchor rather than accepting their reference point and making concessions from it.
CPN CPN Anchoring & Framing Strategies 1
What is 'anchoring' in negotiation?