[juschuma]

Regarding who makes the 1st offer, it depends on what you are negotiating. For an item/service where the value can wildly vary depending on each person's motivation, you want the other party to set the 1st price. As an example, let's say you need a DJ at the last minute for a party you are throwing tonight. You might be willing to pay $1000 because you know it's last minute and are desperate, however, the DJ might have no work that night or might be new to the business and might do the job for $250. So, by letting him set the 1st price (and knowing info about him) you could save yourself tons of cash.

The other example is where there is a fairly well defined price range, such as buying or selling a video game that retails for $50. In this case, it's better that you set the price as it establishes a baseline to begin the negotiations from.

Most importantly is knowing information about your adversary (i.e. what are their motiviations). The few minutes that you spend talking before the negotations begin are the most critical and you should gently probe for information. You will be surprsised at how much valuable info they give up. Alternatively, be careful to disclose too much info about your own situation.