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Consumer negotiation

Introduction

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Negotiations have a significant impact on the savings of a customer during the business relationship. The authors of this article assume that the transfer price lies between the manufactures production costs and the maximum retail price and that the negotiations occur in an incomplete and the producer is not sure on the consumer price. Every negotiator has the ability to convince the other that the surplus is smaller than it real is. The article also uses the game-theoretic model (Perry & Grossman 1986)   to predict the outcomes and behavior in a negotiation scenario.  In both experiments described by this article fail to describe the bargaining outcomes and behaviors since the players took too much time to agree.  The authors conclude that the negotiation mechanisms depend on the economic characteristics of the negotiation situation and that social and individual contexts influence the outcome of the consumer negotiation.

References

Bazerman, M. H. (2001). Consumer research for consumers. Journal of Consumer Research27(4), 499-504.

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