Extreme Opening Offers: How to Stay Grounded Without Giving Ground
Every mediator and negotiator knows the moment: one side opens with an extreme offer, laughably high or low. And yet, the receiving end is in no mood to laugh. Mismanaging this moment can cost credibility, momentum, and outcome.
Understanding how to interpret that offer and respond effectively is one of the most valuable skills a negotiator can develop. It can make the difference between a productive or derailed negotiation.
Why Do Parties Make Extreme Offers?
Extreme offers are often assumed to be bad-faith tactics, but in practice, the motives behind them are more nuanced:
Anchoring. A party may open with an extreme number to set a cognitive anchor—one that shifts the frame of reference and pulls the negotiation toward their terms, even if the number itself is not credible. The anchoring effect is a cognitive bias that is well-documented in research studies. I wrote more about it in a prior blog post: Anchoring and Asymmetry: Strategic Considerations for Making the First Offer.
Information Seeking. Some offers are intended to test the outer boundaries of the bargaining zone, particularly when a party lacks clear information about the other side’s reservation point.
Concession Planning. Starting far from one’s true goal can create room for staged concessions, designed to appear meaningful while remaining within a preferred outcome range.
Projection of Power or Confidence. An ambitious number may be aimed at influencing not only the other party, but internal stakeholders who expect assertiveness or strength.
Inexperience or Misunderstanding. In mediation especially, some extreme offers stem from emotion, overconfidence, or a fundamental misread of the law, facts, or risk. Some extreme offers are rooted in self-serving biases—unrealistic assessments of legal strength that require careful probing or neutral reality testing.
Approaches for Responding
When faced with an extreme offer, think about gathering information to determine motive and assess seriousness of the offer, neutralizing anchoring effects, and shaping the path forward.
The Strategic Flinch
A flinch is an immediate verbal or behavioral expression of outrage or shock to an offer. Visually, it could be a pause, raised eyebrows, or a tilt of the head. Verbally, it can be a direct statement, such as “that number is not even within the realm of possibility,” or it is “shocking and disappointing.” It shows resistance while setting the emotional tone for what follows.
A study by researchers Fassina and Whyte (2013) demonstrated that negotiators who flinch claim greater value in distributive negotiations. Flinches also may assist the flinching party in countering the cognitive effect of an anchor. However, the research study also suggests that exaggerated emotional reactions can negatively affect relationships that may be necessary for the most efficient settlements. More subtle flinches can effectively claim value without appearing disingenuous or disrespectful.
Ask a Calibrated Information-Gathering Question
Instead of pushing back, pull information. A calibrated question turns a confrontation into a diagnostic:
• “Can you help me understand how you arrived at that number?”
• “What are the assumptions behind that figure?”
• “Is there a framework you’re relying on?”
These types of questions allow time for reflection and signal seriousness without escalation. Most importantly, though, they elicit responses to help you assess whether the offer is tactical or principled, and if the latter, what the standard is on which the principle is based and whether the standard is subjective or objective.
Re-anchor and Change the Game in Response to Tactical Offers
When the counterparty is unable to provide a strong basis for the offer, it is likely to have been tactical – designed to set an anchor, test the waters, provide room for negotiating, and/or project confidence.
Re-anchoring with market comparables, statutory benchmarks, or third-party valuations can help reestablish a credible range without validating the original extreme position. This can be done in combination with a flinch, with labeling the opening party’s offer (“That feels like an opening position meant to test the waters”), humor (“Where do I sign? No, seriously …”), or ignoring the other side’s number altogether.
In doing so, it is important to emphasize the significance of the objective standard and that the new number is not one from which you expect to split the difference with the extreme anchor. This is important because many negotiators have a midpoint heuristic.
Example:
Plaintiff opens at $10 million without using an objective standard.
Defendant counters at $2 million because that’s the low end of range of $2-4 million based on objective standards.
The plaintiff may perceive that the parties are moving towards a “middle” of $6 million, when in fact that would be outside the defendant’s reservation price and therefore outside of the zone of possible agreement.
In resetting the anchor based on objective standards, it helps to make clear that you are doing so and ignoring the other side’s unprincipled anchor. You are changing the game.
Responding to Principled Offers
When the counterparty does provide a principle behind the offer, is it based on objective or subjective standards? If the standard is objective, it may affect the way you look at the negotiation (for example, there may be court precedent or comparables that you were unaware of), it may be wrong (the case was overturned or the comparable is distinguishable), or it provides a route for you to provide an alternative objective standard.
If the principle is subjective – like “fairness” – communication skills become critical. Perspective taking and empathic communications may be first steps to getting the counterparty to recognize the existence of alternate views of fairness and the benefits of changing the discussion to one focusing on objective standards. These can be some of the most difficult situations, and communication skills focused on the specific audience can be critical while holding your ground. For example, see my blog post on mediating with high conflict individuals.
A Word on Tit-for-Tat Game Theory and Reciprocity
Tit-for-tat game theory is useful in getting an opposing party to be responsive, even in a purely distributive situation that is nothing more than haggling. The strategy begins with cooperation and then mirrors the behavior of the other party. When applied thoughtfully, this approach rewards cooperation while deterring escalation.
If one side moves constructively, the other reciprocates. If one side defects—by anchoring aggressively or refusing to engage—then an equivalent response can signal boundaries. This pattern of contingent cooperation can often reestablish fairness and build momentum over time.
Importantly, tit-for-tat also encourages re-entry into cooperation. Once the other side re-engages, the pattern resets, preserving relationships while reinforcing accountability.
Final Thoughts
Extreme offers can derail productive discussion and create unnecessary friction in cases that should resolve. But many negotiators use them—for strategic, psychological, or even habitual reasons.
Don’t let a distorted opening distort your thinking. It helps to respond with a blend of curiosity, clarity, and calm messaging to shift the tone and clarify priorities. Doing all of this, while staying grounded in principle, can help you steer the conversation back to substance for a productive negotiation.