Let's make a deal

At markets overseas, haggling is a way of life.

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    Bargain hunt: A woman looks at pottery jars at a market in Bat Trang, near Hanoi, Vietnam.
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"How much is this?" I asked holding up a gray cotton shirt. A young stall attendant with long black hair tied in a ponytail emerged from behind a pile of clothes. She smiled broadly. I rolled my eyes. I was at an outdoor market in Vietnam. I knew the drill: They give me an insultingly high price. I respond with a ridiculously low price. Somewhere along the way lies the relative value of the item as determined by how much local people are willing to pay for it.

The experience can turn an even-tempered tourist into a rude traveler. Most travelers find the whole concept of charging vacationers exorbitant prices unfair as a matter of principle. Ironically, a good percentage of these same people are staunch champions of fair trade in their home countries.

The reality is that price discrimination is practiced everywhere. Companies in most developed countries dice and slice consumers into different segments and charge them accordingly. Generally, people pay varying prices for same products. The person sitting next to you on the plane most probably didn't pay the same price as you for his ticket. When customers buy a more expensive brand of canned beans over the comparable generic grocery store one, they are often paying more for the same product.

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Marketplaces where the cost of merchandise is not preset work the same way, except that there, shoppers are forced to face head-on the idea of being charged differently depending on who they are. Asking prices climb higher when a vendor believes that a customer can afford to pay more. International travelers, who are mostly citizens of rich countries with means to vacation in far-flung developing countries, end up having to shell out more for the average local resident pays for the same product.

Over the years, I have had to learn to have my own rough reference price point, which is based on what I think the item is worth to me personally, at that particular time, in that particular country.

I have begun to view these shopping experiences for exactly what they are: crude but efficient price discrimination systems. Individual buyers pay what they feel is reasonable. Vendors try to get the most out of each customer. Those who pay more end up subsidizing the price for those who can't. Everyone benefits, albeit in a seemingly unfair way.

That shopping day in Hoi An, I had to remind myself to focus on what I thought was a good price for the gray shirt.

"How much?" I repeated my question. The saleswoman came closer and peered at my face searching for telling signs of what she should charge me. I tried to project a blank face.

With the most confident voice she could muster, she responded, "One hundred ninety" and continued to stare at me with a straight face.

"Noooo!" I exclaimed, my eyes wide with feigned surprise and offense. I stomped my feet. I pretended to walk away.

She didn't betray hesitation. She didn't call after me to come back. She was on top of her game.

I looked back begrudgingly and shouted, "I pay 30!"

Now it was her turn to pretend to be offended. She shook her head. "You crazy!" she yelled. But she knew that I knew how it worked. "One hundred, last price!" she said throwing her hands up in the air.

I considered the offer for a few seconds. "OK, how about I pay 85?" I asked in a conciliatory voice, taking my money out of my wallet.

"OK," she said, smiling now. "Ninety," she pushed my offer up a bit as a matter of course and put the shirt in a bag. She then playfully pointed her index finger at my chest. "Good for you," she beamed and pointed it back at herself, "good for me!"

Indeed. It was only fair.

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