January 2009

When Does One Good Deed Deserve Another?
Rationality suggests that trust should build slowly and that people should proceed cautiously when building a relationship. But what if you only have one chance to decide whether to trust someone?

Madan M. Pillutla

Deepak Malhotra

J. Keith Murnighan

November 2007

Place Your Bids
The traditional belief is that a high first offer results in a high selling price. This belief is rooted in a psychological principle known as anchoring, such that the size of an opening bid is a testament to the item’s value. The numerical value of an anchor sets the tone of more or less prestige of the product up for auction. Furthermore, a high opening bid can spark the rose-colored glasses effect, leading bidders to focus on the more positive features of an item. The researchers show that low rather than high opening bids—for a variety of products from shirts to fancy rugs in online auctions—generate high selling prices, demonstrating a reversal of the anchoring effect.

Gillian Ku

Adam D. Galinsky

J. Keith Murnighan

April 2007

Tough Calls Under Pressure
To achieve big success, you often have to take a big risk. Unfortunately, that's where many people tend to clench up. They base their decisions on fears, outside pressures or uninformed "gut" instincts. Or they make no decision at all -- a choice which in itself can be disastrous.

J. Keith Murnighan

John C. Mowen