Why set high goals in negotiation?

Setting high goals in negotiation is crucial for several reasons:

1. Goal-Oriented Performance: Humans are inherently goal-oriented. Setting lofty goals in a negotiation helps keep individuals engaged and striving for better outcomes. This approach encourages individuals to exceed even their own expectations by discovering new information that can be levered in negotiation 1.

2. Prevention of Low Settlements: Without a lofty goal, negotiators might settle for less favorable outcomes that align too closely with their minimum acceptable terms (BATNA - Best Alternative To a Negotiated Agreement). High goals encourage pushing beyond these limits 1.

3. Problem Solving and Value Creation: High goals can drive a negotiator to explore creative solutions, often leading to value creation for both parties. This approach helps uncover underlying issues and facilitates a negotiation that is not solely focused on concessions but on generating mutual gains 1.

4. Psychological Effect of High Anchoring: The strategy of high anchoring can set the negotiation's tone, where even if the end result is a compromise, it is likely to be higher than what would have been achieved with lower initial expectations. Though caution is advised as high anchoring can sometimes be seen as unrealistic and may impair trust if not handled tactfully 2.

In summary, setting high goals not only galvanizes negotiators towards achieving better-than-anticipated outcomes but also aids in mitigating the risk of settling too low or too quickly. These strategic objectives are instrumental in turning negotiations into opportunities for innovation and mutual satisfaction.