Haggling (Cuban Diary)

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I have a theory about haggling in developing world markets. It’s quite simple. Don’t do it.

Whatever price you are initially offered is almost always lower than half the price you would expect to pay at home. You are already getting a bargain. If the price is still too high – you obviously don’t want or need the thing anyway. To drive the price lower just because you can is morally wrong. To engage in haggling and then not buy the thing is doubly worse. You are merely playing a game with people’s livelihoods.

I’ve heard people argue that it is part of their culture. They expect you to bargain. They inflate the price because you are a tourist and not haggling distorts the economy.

Bullshit. Your money may aid the economy but it in no way distorts it.

And you are not participating in their culture; you are exploiting it. Here’s why.

When people who belong to the same community haggle, it is a form of social interaction designed to reaffirm relationships. The key thing is that each side of the negotiation knows the proper price range of the thing for sale. It’s a range because of variations in market availability. Some days these are the only – or the best — mangos around. Some days, mangos are plentiful. Both parties know this and can come to an agreeable price.

As a tourist, you have no idea of the true value of things. You have no idea if the asking price is fair or outrageous. When there are multiple sellers of a product they will self-regulate the market. Charging you more than they might ask a local for sure, but not so much that there is an incentive for the guy in the next stall to give you a lower offer.

So already the first rule of free markets has been broken – the seller has information you don’t possess.

But there is something more important at play. Power. You, as the visitor, have all the power in the negotiation. You – for the most part – are indifferent whether you buy today or buy this particular shawl as opposed to that particular shirt. You can walk away with nothing lost. The seller on the other hand had to haul his goods – often on his back – to the market, possibly a journey of several hours. And if he doesn’t sell the object, he has to haul it home again. If it is perishable it is a dead loss.

So the seller can be driven to the point where she is actually losing money on the deal, certainly to the point where she is getting nothing for her labour. Because they have to sell and you don’t have to buy, you can literally damage the economy just so you save 50 cents.

So you can haggle all you want. Maybe you’ll come home and brag about the deals you got. But I want you to know one thing. Some of us will think you’re a prick.

And that’s ten minutes (Cuban time).

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