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Thesis Final Report (long)

23 haggling in retail markets riley and zeckhauser

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2.3 Haggling in Retail Markets Riley and Zeckhauser (1983) believe that haggling has actually become a norm in the less developed nations because the concept of fixed pricing by vendors is not acceptable to the customers anymore. Adding to the above view, Doye et al. (2008) state that each individual is a haggler in one way or the other whether they accept it or not. They classify two different kinds of hagglers; a soft haggler and a hard haggler; a soft haggler tries to haggle in a way which is beneficial for both, the buyer and seller, and a hard haggler uses a dominating approach, which usually ends up in a conflict. Harrison (n.d.) suggests that there are different tactics for being a pro at haggling: the attitude that the buyer portrays during haggling and the knowledge of what the current market rate is to get the best price for the good are extremely important. Defranza (2008) further adds that if the price being quoted by the seller is not acceptable, one should go to the next vendor for a better price. Alex (2009) suggests that the buyer should not accept the first quoted price from the seller 7
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and must quote a price lower than what he will eventually pay or has the ability to pay; if the seller is not agreeing to the price which is being quoted then the buyer must pretend to leave, in order to intimidate the seller. With time, like everything else, bargaining has transformed as retail setups have evolved. Botelho (2004) suggests that every era has had its own shopping trend, and in this era of slow economy, the trend is shifting to open air retail centers, as they take less time to construct and the land is less costly. Due to technological innovations and with the advent of the internet, bargaining is now not only limited to the bazaars or brick-and-mortar businesses (Rosenwald 2010). According to Harding et al. (2003), bargaining is common in markets of heterogeneous goods. Their study explained how or real-estate is a market where prices fluctuate and haggling takes place between the two agents before a bargain is met. A similar study by Desai and Purohit (2004) indicates industries like the automobile and service industries as common markets where haggling takes place. 2.4 Open Air Retail Markets 2.4.1 Bazaars and their Origin According to Wolfe (1963), a bazaar is a collection or cluster of shops, either along a street or in a predefined area, mostly found in the low lying areas of developing countries, and a rising trend in the developed world. Dorfman (2010) describes bazaars as a place for communication, meeting and striking a good deal. Bazaars in Iran have been explained by Moosavi (2004), as an outlet for all kinds of social, political, cultural and civic activities of people. 2.4.2 Worldwide Flea Markets There are a number of flea markets across the world. Cat (2009) describes that in all such markets, buyers have the luxury to walk around and choose whichever seller is offering the best rates. He adds that throughout the world, flea markets exist at a wide scale based on their size, quantity and variety of products that they sell.
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