It is my belief that "price negotiation" is a mechanism by which dishonest people are able to do business together. I believe that the entire process is founded on, and carried out in dishonesty. Let's look at an example where I have an item for sale.
[haggling example, where supposedly both parties are "lying" and think the other is also "lying"]
To me, this was not an honorable transaction and neither party is truly happy.
This is purely a matter of your cultural expectations, and the set of values you were raised with. If you spend some time in other parts of the world, and keep an open mind, you’ll see that other people think of haggling in a dramatically different way.
To many, haggling is a fun game, and is undertaken with no ill intent and no hard feelings. It’s a fairly natural outcome when you have a small scale market with no great source of information about universal prices or what each side is actually willing to put up with, and no large operators backed up by economies of scale that small-timers can’t match. In the US, most small purchases are made at retail stores, where the sales clerks have no personal stake in the transaction, there is a clear sticker price on every item, the prices are generally small enough to not bankrupt a middle-class person, and it is easy to compare prices across stores.
As a result, middle-class Americans have a set of cultural norms/values that see negotiations as distasteful.
(Instead of negotiating prices individually, the way large American corporations eke out extra profit is by constantly changing their prices, figuring out how to make slightly different products at different price points to draw different customers, sticking weird items in the small print of contracts, tacking on lots of extra hidden fees, making it difficult for people to cancel recurring payments, or at a less personal scale figuring out how to do arbitrage of supply costs, taxes, various financial instruments, etc.)
It’s only when you get to big-ticket negotiations like furniture, car, or house purchases, or salary negotiations, business deals, political compromises, etc. where you start getting real negotiations. Suddenly, people with middle-class American values are at a huge disadvantage and end up getting screwed over because they don’t have any idea how to negotiate and they think the whole thing seems sleazy.
The way I see it, the set of American middle-class values that see negotiation as wrong is basically a way of smoothing and simplifying many types of transactions, at the expense of never really figuring out the best deal for either side. We make prices a more rigid abstraction than they necessarily have to be, because it’s then easier for us to reason about individual transactions, saving effort. It’s a strategy that only works for middle-class people, because they have enough extra income cushion that losing the deal won’t be catastrophic, and they aren’t very commonly purchasing expensive items that might break the bank. This set of values is a sort of cushion or bubble. It breaks down fast for very poor people who can’t afford it, or for anyone in institutional leadership roles where negotiations really matter. As a result, all the “fair-dealing” folks get squashed out of such roles, and the people left tend to not only be better at negotiation, but also have a much looser set of moral principles overall and less empathy, and at the top levels of business and politics &c. we get a lot of sociopaths. I don’t have great evidence about this, but I have a hunch that the distaste for negotiation among middle-class Americans actually leads us to have worse leaders than we would have if more people had experience and understanding of how to negotiate, because there would be more people who were both good negotiators and had strong moral principles.
I have an Iranian friend who is one of the most upright, loyal, straight-shooting guys I know, but who is a masterful negotiator, because in Iran the custom is to haggle for sport. He constantly gets all kinds of amazing deals on stuff that I would never even try to negotiate for, just by going and asking and being persistent about it. The folks on the other side of his negotiation never obviously end up feeling scammed as far as I can tell, though they might get tired of it if everyone tried to do the same thing.
In particular, it’s not at all necessary for negotiations to be adversarial, aggressive, or underhanded. All the best negotiators I know drive a hard bargain, but are also looking to make deals where the other side ends up happy, not resentful, and are creative about offering up “out of the box” solutions to negotiation problems.
My final advice is to try to mentally prepare yourself to walk away from any deal, any time.
This is good advice for anyone. If anyone wants to read more complete theoretical work about this, the term to look up is best alternative to a negotiated agreement, BATNA.
