Archive for the ‘ethics and values’ Category

Haggling and Shame: Why you shouldn’t be afraid to start with low offers

June 9th, 2010 No comments

Remember my article on basic haggling theory? In it, I explained that a seller has a minimum price in mind below which they will not sell an item. The idea is to get an offer on the table that does not overshoot that minimum by too much. Since you don’t really have any idea what a seller’s minimum price is, if the seller asks you to make an offer and you make an offer that they like, they will accept it on the spot and that’s the end of the transaction… and you missed out on some extra cash you could have kept in your pocket.

But why isn’t making low offers just as easy as understanding the above logic? The constraint is social – e.g., the risk of insulting someone, of looking like a sleazebag, and more importantly jeopardizing your ability to make a purchase at a price you would have otherwise achieved had you not looked like a sleazebag. While you should obviously modify your offers to fit these social considerations, I believe that people vastly overvalue shame, especially in financial issues. If there were one point I wanted to communicate in this article, it would be something simple: start making low offers and to hell with the shame.

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