When you’re negotiating to buy a car, a house, or even a company, don’t make an initial bid with a round number like $10,000 or $1 million or $15 per share. A study of mergers and acquisitions by Petri Hukkanen at Aalto University and Matti Keloharju at Harvard Business School found that investors who offer precise bids ($9,800 or $1.03 million or $14.80 per share) had better market outcomes than those who use round numbers. Because people may assume that more work went into crunching specific numbers, they place more value on precise bids, and so are more likely to accept them, even at a cheaper price. But the authors warn that being too precise (say, offering $1,033,235.83) may make the bidder look suspicious or ridiculous.
Source: When Negotiating a Price, Never Bid with a Round Number
