Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement. Bargaining is an alternative pricing strategy to fixed prices. Optimally, if it costs the retailer nothing to engage and allow bargaining, he can divine the buyer’s willingness to spend. It allows for capturing more consumer surplus as it allows price discrimination, a process whereby a seller can charge a higher price to one buyer who is more eager (by being richer or more desperate). Haggling has largely disappeared in parts of the world where the cost to haggle exceeds the gain to retailers for most common retail items. However, for expensive goods sold to uninformed buyers such as automobiles, bargaining can remain commonplace.
The following items are tagged bargaining table.
Adapted from “When Good People (Seem to) Negotiate in Bad Faith,” by Max H. Bazerman (professor, Harvard Business School), Dolly Chugh (professor, New York University), and Mahzarin R. Banaji (professor, Harvard University).
You probably can recall times when a negotiating opponent made what appeared to be a blatant misstatement. If you’re like most people, you assumed
Adapted from “Coping with Culture at the Bargaining Table,” first published in the Negotiation newsletter.
As if intercultural negotiations weren’t complicated enough, you may find yourself facing a language barrier. Whenever one party doesn’t speak the other party’s language well, you should consider hiring a translator (or one for each language, if necessary).
The presence of translators
Adapted from “Coping with Culture at the Bargaining Table,” first published in the Negotiation newsletter.
Do you have firsthand experience navigating two cultures? Have you lived abroad for a significant period of time? Are you an immigrant, or were you raised by immigrants?
If you are “bicultural,” you may be an especially adept negotiator, research suggests. Researchers
Adapted from “Leading Horses to Water,” first published in the Negotiation newsletter.
The hardest step in negotiation is often the first. Costly lawsuits can drag on if everyone is afraid to be the first to blink. Prospective buyers and sellers can waste endless hours dancing around a possible deal. And in collective bargaining, labor and management
Adapted from “Negotiating with the Green-eyed Monster,” first published in the Negotiation newsletter.
Envy can cause us to engage in deception at the bargaining table. That’s the cautionary finding of research by Simone Moran of Ben-Gurion University in Israel and Maurice E. Schweitzer of the Wharton School at the University of Pennsylvania.
Why might negotiators be more
Adapted from “How to Defuse Threats at the Bargaining Table,” by Katie A. Liljenquist (professor, Brigham Young University) and Adam D. Galinsky (professor, Northwestern University), first published in the Negotiation newsletter.
Sooner or later, every negotiator faces threats at the bargaining table. How should you respond when the other side threatens to walk away, file a
The Devil can be defined as anyone perceived as a harmful adversary. In this one-day course, you will learn how to decide whether to negotiate or fight with the Devils you encounter in your everyday life or whether to just walk away. The program, which is based on Professor Mnookin’s book Bargaining with the Devil and takes place June 21, 2012, teaches you how to arrive at a “wise decision” about how to deal with the Devils and avoid emotional, strategic, and political traps.
Adapted from “Team Negotiating: Strength in Numbers?”, first published in the Negotiation newsletter.
According to conventional wisdom, when it comes to negotiation, there’s strength in numbers. Indeed, several experimental studies have supported the notion that you should bring at least one other person from your organization to the bargaining table if you can. On average, this
Adapted from “Anchors or Trial Balloons?”, first published in the Negotiation newsletter.
The power of anchors in negotiation has been demonstrated time and again. Sellers who demand more tend to get more. Indeed, the initial asking price is usually the best predictor of the final agreement.
A trio of researchers may have found an important exception
Deepak Malhotra is a Professor in the Negotiations, Organizations, and Markets Unit at the Harvard Business School. He teaches Negotiation in a wide variety of executive programs including the Advanced Management Program (AMP), the Owner/President Management Program (OPM), Changing the Game, Strategic Negotiation, and Families in Business.
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