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Thesis Final Report (long)

This shows that in order to be successful a seller

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to give a feel of the traditional markets in India. This shows that in order to be successful, a seller must understand the culture prevailing in the market that he is selling to, in order to achieve positive outcomes. 2.6 Haggling and Decision Making There have been numerous studies on the interactions between buyers and sellers and one such contribution is the Game Theory Model with reference to bargaining. In his research Nash (1950), explained the concept of game theory and said that Nash equilibrium could be achieved by selecting the best possible strategies for generating favorable responses in a two way bargaining situation. According to him, both parties should take into consideration the well-being of the other party before taking any action. It is important to know about what constitutes the haggling process and how decisions are being taken during the buyer and seller interaction. According to Hamilton (2010), no consumer is willing to pay the quoted price in markets where there is no fixed price policy. This is because bargaining is expected in these markets and those who do not bargain will end up paying inflated prices. She adds that one needs skill and patience along with an understanding of the market and alternatives available. Value generation and relationship building are important in the negotiation process in order to provide the buyer with a quality buying experience (Habib, Folberg and Hazlett n.d.). Wheeler (2005) believes that in order to differentiate from competing sellers, one must develop stronger relationships with the buyer and build up credibility. Trust, according to 10
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Dwyer (1984), plays an important role in interactions between buyer and seller and influences the decision making of buyer. In their research studies, Gill and Thanassoulis (2008) classify two types of consumers. The first are “hagglers” who bargain and the others are “non-hagglers” who accept list prices. They add that the price sensitive hagglers approach various sellers, request prices, haggle and choose the best offer. However, in his studies Korn (2007) pointed that there are various costs attached to negotiation that might restrain individuals from haggling. He added that these may include opportunity cost of time and social costs. Nevertheless, the bargaining process may turn to be a frustrating experience for some while a pleasant one for others (Schneider et al 1999). 2.7 Outcomes of Haggling 2.7.1 Rewards Myers (2005) tries to highlight several rewards of haggling and its advantages for consumers: saving money. Khuri (1968) adds that a person can also benefit from gaining social recognition from his peers by haggling successfully. 2.7.2 Punishments Haggling can have its repercussions as well. In their research, Gill and Thanassoulis (2008) discuss the impact of bargainers on markets with price takers. They believe that if all the consumers start to bargain, then the overall prices for buyers would increase as sellers will charge a higher price to offset the bargaining cut-off; the more the sellers in the market, the
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