Getting rid of price haggling can actually tank your sales, even if your new "fixed" price is cheaper than what people were paying before.
SSRN · March 13, 2026 · 6380858
Why it matters
A study of a major automaker found that banning negotiation backfired because it stripped salespeople of their primary psychological tool for 'closing' a deal. Salespeople became less effective at converting leads and intentionally steered customers toward models where they still had the power to haggle.
From the abstract
Price haggling is widely viewed as a source of friction in retail markets: customers bear bargaining costs, and firms face operational complexity. This logic has motivated some firms to adopt fixed pricing. We show that in markets organized around personal selling, eliminating negotiation can backfire. Using lead and transaction data from a major automaker in China that introduced a one-price policy for one model while retaining negotiation for all others at the same dealerships, we find that th