I have had success with being very honest and open about what I felt I was worth. As an Engineer all of the benchmarks are published so it is very easy to justify where you feel you rank in terms of the range and responsibility.
Rather than go out and get a job offer I think it is always more valuable to explain what you feel are worth and if they are willing to pay that you stay. If not you find a new job. If you go the match my new offer route you will always have to do it. If they aren't willing to pay you what you are worth now then they won't in the future.
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