Precise Bids

New research from Keloharju and Hukkanen has one clear piece of advice: "When Negotiating a Price, Never Bid with a Round Number." The argument is that a round number signals that you have no clue what the true value is. A more precises bid indicates that you have done your homework and have a more precise estimate of the underlying value of the object. As a consequence, your counter-party is more likely to accept your bid. The graph reports the returns as a based on round number bids or not.

Another study by Jerez-Fernandez, Angulo, and Oppenheimer based on the TV show The Price Is Right examined the guesses contestants made for the market price of consumer products. Audience suggestions for bids ending in zero were least likely to be chosen.