Why doesn't the average American understand the concept of haggling?

[Tingkai]

Originally posted by DuncanK
If both people are trying to get the best price the actual price has nothing to do with the fair price.

What's your definition of a fair price?

[Skanky Burns]

A fair price is a price you are willing to pay. How does haggling prevent that from occuring?

[Six Thousand Year Old Man]

Originally posted by DuncanK
Old Man,

When you haggle are you trying to establish a price that is fair, or are you trying to get the cheapest price possible? How about the other person? There is no basis to your argument. If both people are trying to get the best price the actual price has nothing to do with the fair price. There isn't even an attempt to reach a fair price, except if they pity you

Semantics.

The fair price is the price that both parties are willing to conduct business at.

If one party is exercising bad judgment, that's their problem. That's the only situation in which the situation isn't 'fair'. For example, you may feel (as an employee) that you should be paid X dollars/year. If nobody will pay you that, it's probably not a 'fair' salary, regardless of how you feel about it.

[DuncanK]

Tingkai,

That's somewhat complicated. Let's start with this and then you can ask another question if you want. Let's say that everyone should get the same price for a good if they are selling it, and everyone should be able to buy the good for the same price if they are buying it. Otherwise you have price descrimination which is actually illegal in many countries.

[Urban Ranger]

Originally posted by MOBIUS
The locals know Americans will do this so they will inflate those prices knowing that the American will do a quick calculation somewhere on the lines of 'gee, that's really cheap', and pay the money.

We stayed at an awesome hotel in Ubud, the 'cultural capital' of Bali, being non Americans our starting price was 400,000 Rupiah for a night, which we reduced to 200,000 Rupiah (about US$20 for a seriously gorgeous room in a beautiful hotel).

In walk the American couple and for them the starting price is 800,000 Rupiah. The guys thinks for a few seconds and works out that US$80 is cheap for a place like this given his experience in the US and says 'OK'.

We stayed there several nights. Because we were not ignorant of the haggling system, we saved the equivalent of US$180 compared to the rates the Americans were paying. Last I heard US$180 wasn't exactly loose change even in the US...

That guy is laughing at you when he's taking your money because he's just scalped another sucker...

It's just a different kind of mentality. $40 to a US tourist could be just chicken feed, and he has better uses for his time. Maybe he doesn't want to get all worked up and ruin his stay. Money is just one of the concerns.

A very bad effect of this practice is, once the news start spreading, tourists will stop going to Bali. Indeed, who wants to be fleeced? That's why the shops here in Hong Kong stopped doing that a long time ago - after all, we want the tourists to come back again and again.

[DuncanK]

Old Man,

Consider this, you build a widget. It takes you 5 days. The highest price you can get for it is 50 cents. That's not fair at all is it?

[Six Thousand Year Old Man]

Originally posted by DuncanK
Old Man,

Consider this, you build a widget. It takes you 5 days. The highest price you can get for it is 50 cents. That's not fair at all is it?

Sure it is, if it's not worth more than 50 cents to anyone. Bottom line is, I stop building widgets. There are lots of things I know how to do - but nobody will pay me to do most of them. The same goes for just about everyone else, I expect.

If you disagree, I'd be glad to spend Sunday carving wooden boats - a skill I picked up in my childhood from my grandfather. It takes me about 45 minutes to carve a 'good' boat. By your reasoning, it's 'fair' that if I build them I should get a 'fair' price. My employer currently pays me approx $225 an hour. PM me and I'll give you my Paypal account # and you can send me $1800 for 11 boats (actually 10.67, but since you're my first customer, you get the extra 1/3 boat as a freebee).

[Urban Ranger]

Originally posted by Six Thousand Year Old Man
Besides, how do I have the upper hand? The vendor knows what the product cost him and what he needs to charge to make a profit. He probably knows what everyone else in the area charges. He certainly knows that I have no clue what the cost of living is where he lives, and no idea of the value of goods in the local currency. What advantage do I have in this transaction, other than the ability to pay far more than his bottom line demands?

You have an upper hand because it's a buyer's market. Frequently, a vendor will sell you a piece of mechandise at a price not satisfactory to him - presumably not at a loss however - because otherwise he will lose a sale and you are going to buy stuff elsewhere. In this case, you are maximising the consumer's surplus at his expense. Sort of like a reversed monopoly.

[DuncanK]

That's just silly. Of course you would rather be buying widgets than selling them if it took 5 days to build one and they only cost 50 cents. If you would rather be one or the other, selling or buying, then that means that it's unfair to be one or the other. Please..... stop being silly.

[Willem]

Originally posted by DuncanK
Old Man,

Consider this, you build a widget. It takes you 5 days. The highest price you can get for it is 50 cents. That's not fair at all is it?

That would depend a lot on the state of the local economy. If for 50 cents the seller can pay his rent, buy his groceries for a week and still have some left over for luxuries, then in his mind it would be fair. You can't base your judgements only by the conditions in your own society.

[Six Thousand Year Old Man]

Originally posted by Urban Ranger


You have an upper hand because it's a buyer's market. Frequently, a vendor will sell you a piece of mechandise at a price not satisfactory to him - presumably not at a loss however - because otherwise he will lose a sale and you are going to buy stuff elsewhere. In this case, you are maximising the consumer's surplus at his expense. Sort of like a reversed monopoly.

Is he better off selling it to me than not selling it to me? If so... that's fair. Vendors make less than ideal deals sometimes, of course. If they find themselves doing it all the time, they change businesses. And the guy selling me T-shirts at the resort is almost certainly doing better than the guy in the agave fields.

Where are all Apolyton's free market capitalists I usually argue with...? I'm surprised they aren't all over this one

[Six Thousand Year Old Man]

Originally posted by DuncanK
That's just silly. Of course you would rather be buying widgets than selling them if it took 5 days to build one and they only cost 50 cents. If you would rather be one or the other, selling or buying, then that means that it's unfair to be one or the other. Please..... stop being silly.

Me silly? You're the one who's confusing business with charity

[DuncanK]

Originally posted by Six Thousand Year Old Man


Is he better off selling it to me than not selling it to me? If so... that's fair. Vendors make less than ideal deals sometimes, of course. If they find themselves doing it all the time, they change businesses. And the guy selling me T-shirts at the resort is almost certainly doing better than the guy in the agave fields.

Where are all Apolyton's free market capitalists I usually argue with...? I'm surprised they aren't all over this one

You're making all kinds of crazy assumptions that you probably aren't aware of. It's not as simple as just switching businessess. I'm sure such a vendor would like to get into the computer market but that's not going to happen.

[DuncanK]

Originally posted by Willem


That would depend a lot on the state of the local economy. If for 50 cents the seller can pay his rent, buy his groceries for a week and still have some left over for luxuries, then in his mind it would be fair. You can't base your judgements only by the conditions in your own society.

True, but I meant this question for Old Man. I'm sure his expenses are not that low. That's why I said 50 cents.

[Six Thousand Year Old Man]

Originally posted by DuncanK

It's not as simple as just switching businessess. I'm sure such a vendor would like to get into the computer market but that's not going to happen.

So because the vendor can't get into a more profitable business, I should pay him more than he's willing to take for it? How's that fair to me?

And, please, share with me some of these crazy assumptions....