Bargaining theory (20TH CENTURY)

A theory of politics as negotiation.

Politics – particularly the internal politics of government, legislatures, and parties – is usefully seen as a series of negotiations or bargains between groups with differing but not fundamentally incompatible interests.

Such a view discounts the likelihood of significant zero-sum situations, and is opposed to conflict theory.

Source:
Geoffrey Roberts and Alistair Edwards, A New Dictionary of Political Analysis (London, 1991)

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 retailers nothing to engage in and allow bargaining, they can deduce buyers’ willingness to spend. Bargaining allows for capturing more consumer surplus as it allows price discrimination, a process whereby a seller can charge a higher price to a more eager buyer (due to his or her having more disposable income or simply by being more eager). 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 such as automobiles sold to uninformed buyers, bargaining can remain commonplace.

Dickering refers to the same process, albeit with a slight negative (petty) connotation.

Bargaining is also the name chosen for the third stage of the Kübler-Ross model (commonly known as the stages of dying), even though it has nothing to do with price negotiations.

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