[Periodic]

I think the key that the buyer must believe there is room for negotiation. If I walked in to a Best Buy and saw the only TV there was being sold for $10k, I'd walk out. But if I saw that one TV was $10k, but with slightly fewer features and slightly smaller size was less, then I have entered a negotiation where we agree on what I'll pay for a given feature set, but I may have anchored on the $10k figure already.

[trjordan]

The point is not actually negotiation, but a perceived deal to be had. You don't have to think you can argue for a lower price, you just have to see that the TV is being sold for $10k, then see the "SALE!" sign next to it that tells you the TV is on sale for $3k. By then, you've already anchored to 10k, and the "negotiation" took 3 seconds.

Full negotiations will definitely drive some people away, but to use anchoring effectively, you can definitely advertised a "standard" price and the real price. With that, I don't see how you'd lose somebody based on that original, and you'd gain a few based on the perceived deal.

[Periodic]

You're right. My point only applies when we're talking about making offers in a vacuum. This thread was discussing making offers or demands such as for salary, where there aren't different numbers floating around. In fact, if you were the first person to interview for a job and demanded a high price, the next guy might look like a bargain in comparison. It is when the other side believes there is room for negotiation that you can make a high/low offer and take advantage of anchoring. If they don't believe they can negotiate then you'll just drive them away.