Haggling or fixed price?

So, haggling, when done properly, is the coming to agreement over a price suitable for both the buyer and the seller. It's not about getting the lowest possible price.

Fixed prices are as almost all of us know them. You go into a shop, you see the price, you pay the price. No ifs, ands, or buts.

From an egalitarian standpoint, is haggling fairer?

My thinking is that it is because it injects an element of progressive pricing. Given my experience in haggling countries those with more money tend to pay more than those with less, despite their best efforts to pay as little as possible.

So could the convention of fixed prices be contributing to inequality by forcing those with less to pay more than they otherwise would, and allowing those with more to pay less than they should given the opportunity cost to their time of attempting to make these goods themselves[1]?

What do you think?

My memory of my economics stuff is rusty so please feel free to remind me about economic rent and all that jazz.

[1] Someone making 6 an hour, if it would take them 5 hours to make a widget, would be prepared to pay 30 for it. Someone making 500 would be prepared to pay 2500 for it, no?

I really really really hate haggling and have others do it for me. LOL

Surprisingly though Some people enjoy it. To me, I don't even bother and I go get someone who likes to do it. :)

I personally will take fixed, fair prices.

Lil devils x:
I really really really hate haggling and have others do it for me. LOL

Surprisingly though Some people enjoy it. To me, I don't even bother and I go get someone who likes to do it. :)

I personally will take fixed, fair prices.

Heh it's a matter of what you're used to I think. :P

I quite enjoy it, but then I've done it a lot. I also don't feel guilty about it because, as I say, I don't try and get the lowest price. Just a price I'm happy with. My rule of thumb is to pay what I would pay in pounds in the UK for the same item. That usually results in a satisfied me and a very happy seller who benefits from his/her currency's exchange rate.

you arent the only one to hate it. i even hate doing it in rpgs

wombat_of_war:
you arent the only one to hate it. i even hate doing it in rpgs

LOL.. I had people that did it for me in MMORPGS so I wouldn't have to do it... XD

Haha, in the most abstract of theory, where every buyer were willing to disclose and negotiate based solely on their exact ability to pay, and every seller willing to negotiate based only on those parameters, "progressive pricing" would be the result.

In reality, where negotiation is based on discernible need, not so much. It would be quite easy to pressure a single mother without a car into paying more for diapers at the local store. Something which could not be done to a wealthy couple who could drive all their business elsewhere.

Those who have no alternative benefits from fixed pricing, in that the de facto monopoly they're subject to isn't being exploited. And you'd obviously never get someone who makes a billion dollars a year to pay $8,000 for a lollipop, even if that's the part of his budget its fixed price would have occupied were he making $30,000 a year. Why? Because there is not not sufficient need, and any need would've surely been overwhelmed by the sense of discrimination. Whilst formal logical causality might be established within a bubble of select(ive) environment factors (...arguably a favorite passtime of economists), the whole thing is as far removed from reality as that idea that the U.N. is (still) an organization of liberalism.

I for one never haggle. If a seller does not offer a fair price to begin with, then I see no reason to conduct my business there. And if I personally consider the initial price fair, I see no reason to dispute it, since it'll be me who're paying it.

Danny Ocean:
From an egalitarian standpoint, is haggling fairer?

I can only answer from personal experience. My first international vacation by myself was a trip to India. I was at the time living in Japan. I quickly discovered that in India many shopkeepers don't list the actual price on products. Each product is coded with a numbered tag that corresponds to a number in the shopkeeper's book. The shopkeeper then sets the price based on what they think the customer can afford. Since I was an American working in Japan, I was given the maximum possible price. Never mind that at the time I was working a poorly-paid, entry-level position. I came from the two most powerful economies on the planet. Therefore every shopkeeper I met tried to squeeze me for every rupee I had. Despite hearing countless stories of people backpacking their way across the continent for a song and a dance, I had to cut my trip short because I ran out of funds (and also because the Sumatra Tsunami hit my next destination).

So I can see how people might think that a haggling culture is fairer, but from my POV it's nothing but another institutionalized form of bias. And despite the fact that I have a variety of reasons to enjoy a subsequent trip to India, the haggling culture is pretty much the reason I don't return. It may not be fair, it may reflect my own biases, but the fact is I just don't feel like I can take another trip there and trust people not to rip me off.

I really enjoy the idea of haggling. Because you, the potential customer lets the value of things. It's less of 'how much is this really worth' and more 'how much is this worth to me.'

In our fixed price world, you don't have that freedom.

A system of haggling tends to take advantage of people who are less aware of market value than others, those that are quite simply not good at reading other people, and those that do not express themselves well. And then there are people like myself who simply do not have the patience to nag at some merchant over the details of every little purchase and end up paying much more than others as a result.

If you couldn't guess, my answer is a resounding no.

Heronblade:
A system of haggling tends to take advantage of people who are less aware of market value than others, those that are quite simply not good at reading other people, and those that do not express themselves well. And then there are people like myself who simply do not have the patience to nag at some merchant over the details of every little purchase and end up paying much more than others as a result.

If you couldn't guess, my answer is a resounding no.

Yea, I just walk away when people try to haggle with me, and buy it elsewhere. I can't imagine I would haggle for anything ever unless I would die without it.

Haggling sucks, when I visit Mexico and look at stuff in kiosks I find it taxing beyond belief. Typically now when they offer an initial price I just say no thanks and put it down, if they drop the price before I am out of earshot I might come back and buy it.

Well I personally don't like haggling. Maybe I'm just a lazy sucker for convenience, but I have places to be and things to do, and I prefer to get it over with quickly. Basically, I'm trading money for time.

And there's this:

Heronblade:
A system of haggling tends to take advantage of people who are less aware of market value than others, those that are quite simply not good at reading other people, and those that do not express themselves well. And then there are people like myself who simply do not have the patience to nag at some merchant over the details of every little purchase and end up paying much more than others as a result.

If you couldn't guess, my answer is a resounding no.

I second this. Haggling is not some kind of a strictly analytical process, it does not have established "rules of conduct" that are the same for everyone, or rather, the rule it would have set, e.g. "Agreeing on a price the buyer is willing to pay and the seller is willing to accept", is vague and general enough that it doesn't account for circumstance.

To draw a shoddy analogy, imagine the rules of association football. The vague and general rule is that "Players are not to touch the ball with their hands."

Except if they're a goalkeeper inside their own penatly box, and the ball wasn't passed back to them by their teammate.
Except when they're doing a throw-in.
Except when they're setting a ball for a free kick, corner kick, etc.

Those exceptions arise from circumstance, but are quite necessary for the game to function. And it's a pretty clear-cut set of rules, one would think there's not much room for misinterpreting them. And yet, mistakes are made. A referee doesn't notice a player handling the ball it because there's another player in the way, for example.

With haggling and human psychology in play, it all gets that more prone to circumstance and personalities of those involved.

I don't have enough charisma points to haggle efficiently so I prefer fixed prices.

Yeah, haggling allows for price discrimination based on the seller's perception of the buyer's income. It also allows for price discrimination based on race, religion, nationality, politics, sexual orientation, employment, and so on. Sellers may even decide they want to give their wealthier customers discounts merely for being wealthy-- it may even be in their interest to do so if it generates more business from that customer.

Probably the most problematic thing about haggling is that it adds a transaction cost. It's alright for a low volume of goods and services, but is quite a bit less efficient than setting a fixed price. Haggling also has the trouble of making it somewhat essential that the (ideally sole) owner of the shop (or the goods and services in question) is available to negotiate, as leaving such negotiations to an employee could be subject to conflicts of interest or, at least, insufficient interest in the transaction on the part of the negotiator. Whether that would lead to less generosity or more (which would tend to depend mostly on the employee or his relationship to the employer, probably) fixed price handles the case in a much more straightforward manner and allows a grocer to have 10 people working cash registers at once slamming out whole shopping carts of goods in just minutes. Or the process can even be automated "self"-service.

If I lived somewhere where haggling was the standard, shopping would mean the holy 10 year old shirt and torn jeans.

The problem is than once haggling becomes expected, merchants will intentionally overprice their wares by large margins with the assumption that it will be "haggled down" to a "normal" price. This means people who don't haggle correctly get way overcharged.

Haggling has the same problem as tipping, once it becomes "expected" it completely screws up the system.

cthulhuspawn82:
The problem is than once haggling becomes expected, merchants will intentionally overprice their wares by large margins with the assumption that it will be "haggled down" to a "normal" price.

As opposed to our current system of merchants intentionally overpricing their goods, only to have "sales" to bring them down to a "normal" price?

 

Reply to Thread

This thread is locked