Lowballing: meaning, definitions and examples

Etymology

• The term likely comes from the combination of 'low' meaning little or less and 'balling', which is related to making offers in negotiation contexts.
• First known usage was in the 1960s, particularly in American business and sales jargon.
• It relates to earlier phrases like 'lowball price', indicating a price much lower than market value.

Business Practices

• Lowballing is often used to negotiate deals, especially in real estate and auto sales, to encourage a buyer's interest.
• It can backfire in negotiations if the other party feels insulted or undervalued, potentially ending discussions prematurely.
• Many professionals advise against lowballing as it can harm reputations and long-term relationships in business.

Psychology

• This strategy plays on the psychological principle of anchoring, setting a low starting point for negotiations.
• Some studies suggest that making a low offer can cause others to lower their expectations, often leading to better deals for the lowballer.
• However, continuously using this tactic may lead to trust issues, as it can create a perception of dishonesty.

Pop Culture

• The concept is often portrayed in movies and TV shows during negotiation scenes, highlighting the tension of trying to get the best deal.
• Comedies frequently exaggerate lowballing scenarios for humor, showing the awkwardness that can arise from low offers.
• Various reality shows, especially those dealing with investments or buying, often showcase lowballing as contestants try to win over sellers.

Ethics

• Using lowballing can raise ethical questions about fairness and integrity in negotiations.
• Proponents argue that it's just a tactic in competitive environments, while opponents view it as manipulative and disrespectful.
• Many industries have codes of conduct that advise against excessively low offers to maintain ethical standards.