Bargain
Origin
Middle English: from Old French bargaine (noun), bargaignier (verb); probably of Germanic origin and related to German borgen ‘borrow.’
Definitions
- 1: an agreement between two or more parties as to what each party will do for the other: the extraconstitutional bargain between the northern elite and the southern planters.
- 2: a thing bought or offered for sale more cheaply than is usual or expected: the secondhand table was a real bargain | [ as modifier ] : household and electrical goods at bargain prices.
Description
Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service debate the price and exact nature of a transaction. If the bargaining produces agreement on terms, the transaction takes place. Bargaining is an alternative pricing strategy to fixed prices. Optimally, if it costs the retailer nothing to engage and allow bargaining, he/she can divine the buyer's willingness to spend. It allows for capturing more consumer surplus as it allows price discrimination, a process whereby a seller can charge a higher price to one buyer who is more eager (by being richer or more desperate). Haggling has largely disappeared in parts of the world where the cost to haggle exceeds the gain to retailers for most common retail items. However, for expensive goods sold to uninformed buyers such as automobiles, bargaining can remain commonplace. Dickering refers to the same process, albeit with a slight negative (petty) connotation.[1]
