HAGGLING

'Haggling' is the process of negotiating the price of something (e.g. a piece of merchandise or a service) with the intent of getting a better deal than the stated price. This is the opposite of the ''just one price policy'' implemented by many stores in the 20th century. Optimally, if it costs the retailer nothing to engage and allow haggling, 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 such as automobiles, haggling can remain commonplace.

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See also

★ Retailing

★ Price discrimination

★ Bargaining

References