* Illustration: Jason Lee * When shopping for used stuff on the Web, are you reluctant to make an offer below the asking price? It's understandable: A poorly delivered lowball bid can offend a seller. But that doesn't mean you can't drive a hard bargain.
Overpricing is common on sites like craigslist, due to what behavioral economists call the endowment effect: The mere fact of owning something tends to make one overestimate its worth. That means there's room for negotiation—if you can bring the seller around to your point of view. Which raises another principle of market psychology: fairness.
Consider the following actual experiment: A test subject is given $10 on the condition that they offer some of it to a second person. If the offer is accepted, they both walk away with the cash. If it's rejected, neither gets a thing. Classical economics predicts that the second person would accept any offer—it's free money, after all. But time and again, offers of less than 30 percent are summarily rejected and neither party gets a dime.
"People routinely refuse offers they think aren't fair, even if it hurts them," says economist Dan Ariely, author of Predictably Irrational. The fact is, many sellers would rather hang on to something they no longer use than accept less than they think it's worth. In that light, negotiations aren't about besting the seller, they're about finding agreement on what's right. Therefore, a good negotiator works on changing perceptions.
A few guidelines: Don't lowball without providing a solid rationale. Negotiate in the most personal medium possible—in person, preferably, but on the phone can work too. And play to their reactions. "A counteroffer should tell your opponent that you respect their view," says Yale University economist Keith Chen. Remember: The phrase "an offer you can't refuse" has negative connotations.
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