Bargaining

Bargaining, also called haggling, is common in many countries, such as most of Asia and North Africa. In other places, it may generally be used only for large items with no fixed price, such as buying a house or a used car, but it is possible in almost any flea market or tourist shop anywhere.

Count 'em up


0 to 9 in various scripts:

Arabic & Persian 
۰, ۱, ۲, ۳, ٤, ۵, ٦, ۷, ۸, ۹
Devanagari 
०, १, २, ३, ४, ५, ६, ७, ८, ९
Thai
๐, ๑, ๒, ๓, ๔, ๕, ๖, ๗, ๘, ๙
Chinese and Japanese 
〇, 一, 二, 三, 四, 五, 六, 七, 八, 九

In such places, if you don't bargain, you are almost certain to pay more than necessary. Vendors expect a bit of bargaining so their initial asking price is considerably higher than what they hope to receive, which in turn is higher than the minimum they could accept and still make a profit.

By all means bargain hard and try not to get cheated, but do not expect too much. You are a visiting amateur going up against a professional on his or her home turf. Just holding your own and getting a reasonable price will be an accomplishment; do not expect to achieve some miraculously low price. Against a pro boxer, almost anyone would be justifiably proud just to leave the ring on their feet; hoping to win the bout would be foolish and hoping to score a knockout utterly ludicrous.

Also consider your priorities. If you are bargaining over some silk item that would cost $200 back home, it may not be worth worrying about whether you pay $20 or $25 in Thailand. If you make good money and are spending a substantial chunk of it on a trip, then it makes no sense to waste a half an hour to save $5; your time is worth more than that and you have plenty of better things to do with it during a trip.

Sometimes the amounts you are arguing over are just a pittance to a traveller from a relatively rich country, but are quite important to someone in a poorer country who needs to make a living off the tourist trade. An amount that is large to you may be huge to the vendor. In some cases, for example, a big sale might mean the difference between all the vendor's children going to school this year or just the boys.

If possible, try to buy in areas where there are many vendors and competition may bring prices down. One traveller reports bargaining for a fine silk shawl at a well-known scenic site in China and thinking he had done reasonably well beating the price down from ¥250 to 100, until he found the same shawls in a nearby commercial area with an asking price of ¥80.

Don't get upset if you pay somewhat more than a local would; that is quite normal in many areas. Even getting "cheated" by a merchant in a local bazaar, perhaps paying $25 for something a local could buy for $10, is often better than buying it in some overpriced airport shop. It will usually be cheaper if you have even basic bargaining skill, and buying in the bazaar puts money into the local economy, rather than giving it to some large company or, in some places, helping crooked officials line their pockets.

Basic tactics

The key to making a good deal is knowing the right price. If you know the right price you can just state your price, start leaving the store and your offer will be accepted. Try to have a rough understanding of the item's value before you start haggling.

Do not let unknown locals "help", with either bargaining or finding what you need; you will very likely end up paying an extra commission. In many places, this includes tourist guides and taxi or rickshaw drivers; some shops pay them substantial commissions to bring in customers, those shops are usually overpriced, and some guides or drivers will take you only to such shops. To get good prices, you need to go shopping without a guide and preferably on foot.

It may help if you can adjust the vendor's expectations. If he thinks you are rich, the price may go up. To get a better price, tell him you are a backpacker on a tiny budget, a student, an English teacher on a low local salary, or whatever. You cannot really afford what he is selling, but you like it a lot; can he do something to make it possible? When doing this, try not to look rich; a Rolex on your wrist and $2000 worth of camera around your neck will definitely not help.

Be strong. Don't let them get to you, no matter how hard they push. You might be offered tea, coffee, snacks, etc. You can accept them and it does not mean you have to buy anything, although you may be 'guilt-tripped' later. You have only one obligation; to buy once a price is agreed. Until you make an offer that the vendor accepts or vice versa, you have absolutely no obligations beyond common courtesy.

During the actual bargaining:

Some guides and articles suggest that, when you have no idea what a fair price might be, you should offer a fixed percentage (a half, a third, a quarter...) of the shopkeeper's first price. Alas, in general this doesn't work: many shopkeepers are perfectly aware of this tactic and will thus first offer an absolutely ridiculous price that can be tens or hundreds of times more than the real value, which they will then be more than willing to negotiate down to "half".

If you feel that you must have a general rule to go by in those situations, remember that in tourist areas it is quite common for a moderately skilled bargainer to pay below a quarter of the initial asking price, and an eighth is not unheard of. You should start below what you hope to pay, so your first offer should be around a tenth of the asking price. If you really want to just get the bargaining over with, and do not mind paying over the odds to accomplish that, you could go as high as a fifth.

More advanced methods

Some bargaining techniques take more effort or planning, or just more nerve or more practice:

Porcelain in a Shanghai market

The more you know about the merchandise, the better. For example, you can buy cheap pottery in any flea market on Earth with no expertise at all, but if you are planning a trip and want to spend a significant amount to bring home some fine porcelain then you should read a few books on the subject and visit museums (either near home or at the destination) before shopping. The Wikipedia articles on the topic may be a fine starting point.

The more you know about the country you are in, the better. You may not get the price a local would pay, but you are almost certain both to enjoy your shopping more that an ignorant foreigner would and to get a better price. Specifically:

Some tactics require a bit of acting skill. These may even be worth practicing beforehand.

If the vendor's asking price is absurdly high, by all means laugh or show astonishment in some way. Ideally, ask in the local language if he is crazy. This is not considered rude, provided you smile as you say it, and it indicates to the vendor that you are aware of the item's real value, even if you are not.

Bargaining responsibly

When bargaining, do so responsibly.

Even in cultures where haggling is the norm, many items do have fixed prices. For example, groceries and alcohol usually have fixed prices. Do not haggle when buying e.g. bus tickets; check for a price list in the bus terminal or ask the other passengers in the line or look over the shoulder of the one in front of you to see what the locals pay.

Choose your battles. By all means bargain when buying a carpet from a posh bazaar shop. But if a bottle of water is too expensive, buy it somewhere else.

Don't back out. If you make an offer consider yourself committed to buy if the vendor accepts that price. Don't waste your time or the seller's time bargaining if you have no intention of buying. Even an offer made in jest creates an obligation. As you walk by, the vendor waves a sword worth ¥200 at most and asks for 800. You laugh, say "maybe 100" and walk on. If he calls you back yelling "OK", give him the 100 and take the sword.

Do not let the other person "lose face". Often it is said that "everything is negotiable" - but it isn't. Loss of face is never negotiable. Be aware that the person with whom you are dealing has a family and responsibilities. You are trying to find an agreed position.

Above all, don't take it too seriously; have a sense of humour and know when to accept an offer. Remember that vendors are generally not evil swindlers attempting to trick people out of their hard-earned money; they are often just businessmen working to support their families.

Bargaining as a problem in game theory

Disclaimer

The writer here is not an expert in the theory, only a dabbler.

Also, as in any application of a theory to practical problems, there is some risk of oversimplifying or of ignoring aspects of the problem which the model does not cover, although there is also some chance of the theory suggesting useful ways to look at the problem.

Game theory is a group of mathematical techniques that can be used to analyze almost any human interaction, not just things that are actually games. It has a fairly wide range of applications in both psychology and economics. In particular, it can be applied to almost any situation involving negotiation or bargaining, and it has been; in fact there is a whole branch of the theory that deals with "bargaining games".

A basic part of the theory is a distinction between different classes of game:

Bargaining is a mixed game.

The two goals are basically in conflict; reaching a deal may require the buyer paying more or the vendor accepting less. Sometimes the conflict is not reconcilable without a major sacrifice by one player. In those situations, the best solution is to walk away. You should not want to make such a sacrifice yourself and cannot expect one from the vendor.

When haggling, your goal is not to "win", or just to get the lowest possible price, or to eliminate the vendor's profit, but to find a mutually satisfactory price.

This article is issued from Wikivoyage - version of the Thursday, March 03, 2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.