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By Gwynn Guilford Reporter. United States Published December 16, This article is more than 2 years old. Sign me up. Update your browser for the best experience. The individual trying to buy the good and service is trying to pay the least amount possible, while the seller's primary objective is to maximize the selling price. Haggling also may go by the names bargaining, quibbling, dickering, or informal negotiating.
The act of haggling has been around since ancient times and continues to this day. It is a common practice in real estate negotiations , car purchases, and at informal flea markets—while it is rarely used in retail settings such as at supermarkets, pharmacies, or brand-name clothing stores. Not all transactions are open to bargaining. Both religious beliefs and regional customs may determine whether or not the seller is willing to engage in bargaining.
Globally, haggling has different accepted levels of tolerance. In Europe and North America, haggling is generally accepted for larger ticket items like automobiles, jewelry, and real estate—but not for smaller day-to-day items like combs or a gallon of milk.
However, in other regions around the world, haggling for smaller items is generally accepted and is part of the culture. In these regions, children are taught to haggle at a young age to ensure that they are receiving the best-perceived deal when making any type of purchase. The acceptance of haggling can also be determined by location. In department and grocery stores, haggling is often expressly prohibited, but at places like flea markets, outdoor marketplaces, and bazaars, haggling is accepted and encouraged.
Many consider haggling to be an art and a skill of persuasion rather than a rational economic activity. Various economic theories have been proposed to explain the process of haggling. The behavioral theory proposes that certain people have different personalities or dispositions toward negotiations rather than taking prices as they are given. The game theory proposes solutions to bargaining problems as part of strategic action and can be interpreted as part of reaching a Nash Equilibrium. Haggling is also considered when considering retail pricing theory.
Mainstream neoclassical economics, however, supposes that all market prices are jointly determined by supply and demand and so there would be no need for haggling since all prices would always reflect an equilibrium level. Purchasing A Home. Behavioral Economics. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. Look out for markets frequented only by locals. You will find you get hassled less and treated with a bit more respect. Explore a little and get a feel for the price.
When you do start negotiating, if the price seems to high just walk away. Store owners are often willing to reduce the price when you purchase two or more things at once.
They understand that their profit instantly doubles when they can get you to buy a second item. This is a great way to get souvenirs for friends and family, so consider getting that second pair of elephant pants! When you reach a low price, THEN ask how much for two or three, etc.
In the end, these are all just tips to help you avoid getting ripped off. Understand that you can go too far with bartering in Vietnam. Enjoy yourself and try to experience the culture, but consider being generous when shopkeepers are nice to you.
Delilah Hart is a born and bred New Zealander who loves exploring the world and helping others to do the same. Follow her journeys on Instagram and check out her travel blog, Our Travel Mix. Starting low is smart, Delilah. I always give myself ample room for bargaining.
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