Definition of ‘negotiable’
Bargaining is when two parties involved in the transaction such as the purchase of goods and services, to negotiate the price until both parties can agree on a fair price. The bargaining process involves two parties making successive proposals and counter-proposals to each other for as long as the price is agreed on. The individual tried to buy a nice and trying to pay as little as possible, while the main goal of the seller to increase the sale price. Haggling can also go by the names of bargaining, chicanery, indecision, and informal negotiation.
The act of haggling has been around since ancient times and continues to this day. It is customary in negotiations of real estate, buying cars, and in the informal flea markets – while it is rarely used in retail, for example, supermarkets, or specialty clothing stores.
Breaking down the ‘bargain’
Not all transactions are open to negotiation. Both religious beliefs and regional custom may determine whether seller willing to bargain. Globally, haggling has different accepted levels of tolerance. In Europe and North America, bargaining is common for big ticket items like cars, jewelry and real estate, but not less than day-to-day items like a comb or a liter of milk. However, in other regions of the world, haggling for small items is common and is part of the culture. In these regions, children are taught to haggle at a young age, to make sure they get the best perceived online when making any purchases. Welcome haggling can also be determined by location. In Department and grocery stores, often haggling is strictly prohibited, but in places such as flea markets, outdoor markets and bazaars, bargaining is accepted and encouraged. Many people believe that bargaining is the art and skill of persuasion, not rational economic activity.
Various economic theories have been proposed to explain the process of bargaining. Behavioral theory suggests that certain people have different personalities or propensity to negotiate, and not prices, as they are given. Game theory offers a solution to the problem of negotiations in the framework of the strategic action, and can be interpreted in the context of achieving the Nash equilibrium. Torg is also considered in the theory of the retail price. However, believes of the mainstream (neoclassical) Economics is that all market prices are jointly determined by supply and demand and thus there would be no need for bargaining, as all prices always reflect the equilibrium level.