bargaining

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.

Your Own Worst Enemy

Posted by & filed under International Negotiation.

Why do some people get under our skin? Something they do or say pushes our hot buttons. Annoyance doesn’t foster productive negotiation, of course, but it’s not our fault that they’re getting on our nerves. Or is it?

Psychologists caution that when we have strong visceral reactions to other people, we should examine our own feelings and attitudes, not just theirs. If we’re honest with ourselves, we may recognize in other people’s behavior the dark side of our own nature.

Barbara Gray, professor of management and organization at Pennsylvania State University, calls this internal demon our nemesis. It’s always lurking inside us, ready to pounce.

Leading Horses to Water

Posted by & filed under Negotiation Skills.

The hardest step in negotiation is often the first. Costly lawsuits can drag on it 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 teams sometimes paint themselves into corners by refusing to negotiate “matters of principle.”

Accounting for Outsiders in Your Negotiations

Posted by & filed under Negotiation Skills.

If you’re in the middle of talks that seem to be going well, here’s a warning: consider the impact of the agreement on those who aren’t at the table, or suffer the consequences. That’s a lesson that Apple and some of the largest U.S. book publishers are currently learning the hard way.

On April 12, the U.S. Department of Justice (DOJ) sued Apple and five major U.S. publishers for colluding to raise the price of e-books during secretive, anti-competitive negotiations. Three of the publishers have settle the suit; two others and Apple have so far been unwilling to settle.

Finally, A Win-Win Deal from Congress

Posted by & filed under Business Negotiations.

To the surprise of many, Congress reached a bipartisan agreement on the 17th of February to extend payroll tax cuts and unemployment benefits. It was only the second time a House bill in the 112th Congress split roughly along party lines, according to the New York Times.

Largely regarded as a coup for Congressional Democrats, the bill maintains a two-percentage point payroll tax cut for 160 million working Americans and provides additional unemployment benefits to millions. Republicans had wanted to fund the payroll tax with spending cuts but, facing Democratic opposition, agreed to allow the package to increase the budget deficit. Republicans also reluctantly agreed to extend the unemployment insurance program long past the date they originally sought. Republicans did, however, score concessions from the Democrats, including new limits on unemployment compensation and elimination of the preventative health spending provision of the 2010 healthcare overhaul.

Moving Forward in Mediation Together

Posted by & filed under Mediation.

The teacher’s federation has qualms with the current education bill’s stipulations regarding the scheduling and terms for mediation between the federation and provincial government. The government is open to further negotiations, but refuses to offer more money. Susan Lambert, president of the British Columbia Teacher’s Federation, asserts that the government is acting in bad faith, claiming the “whole process is a mockery of fair play…There is a predetermined outcome that requires us to be complacent in stripping out of our collective agreement rights that [the employers tried to take out] at the bargaining table, rights that took a long time to negotiate.” Could mediation unlock value between these parties that was previously left untouched, even though one side has little faith in the process?

When Others are Counting on You

Posted by & filed under Conflict Resolution.

Unless your official title is “lawyer” or “agent” you probably don’t think of yourself as an agent. But if you’ve ever represented a family member, your boss, your department, or your organization in a negotiation, you’ve served as that party’s agent.

Representing others at the bargaining table creates both opportunities and hazards. In their book, Negotiating on Behalf of Others (Sage, 1999), professors Robert Mnookin of Harvard Law School and Lawrence Susskind of the Massachusetts Institute of Technology offer guidance to negotiators who find themselves serving as agents.

Should Your Boss Be at the Negotiation Table?

Posted by & filed under Meeting Facilitation.

Imagine that you are about to begin a negotiation whose subject matter is squarely within your area of responsibility at my company. However, the dollar amounts at stake are so large that you are tempted to kick it upstairs to your boss, or at least involve your boss directly in the negotiation. What are the pros and cons of doing so?

Professor Mnookin participates in panel discussion on Shalit deal

Posted by & filed under International Negotiation, Middle East Negotiation Initiative.

Hostage negotiations are challenging in any situation, but the Israeli-Palestinian prisoner exchange involving Gilad Shalit in 2011 was more challenging than most.  Learning lessons from this exchange was the topic of a panel discussion, entitled “In the Aftermath of the Shalit Deal: Insights regarding Hostage-Barricade Situations and Hostage Negotiations,” held at Haifa University’s School of

Dealing with the Other Side’s Constituents

Posted by & filed under Business Negotiations.

During a meeting with a potential customer, a new salesperson leaves the room several times to make phone calls. Each time when she returns, she tells the customer she can’t accept the terms they just negotiated. Exasperate by her apparent lack of authority, the customer ends the meeting abruptly.

As this scenario shows, your counterpart’s constituents

Negotiating for a Higher Salary

Posted by & filed under Business Negotiations.

For a new employee, negotiating a salary offer up by $5,000 could make a huge difference over the course of a career. A 25-year-old employee who enters the job market at $55,000 will earn about $634,000 more over the course of a 40-year career (assuming annual 5% raises) than an employee who starts out at