Getting rid of haggling can actually scare off customers, even if the new "fixed" price is cheaper than what they were paying before.
SocArXiv · March 13, 2026 · ydutr_v1
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Why it matters
We usually assume haggling is a source of stress that customers hate. However, this study of car dealerships found that when negotiation is removed, salespeople lose their most effective 'deal-closing' tool and become less motivated, often steering customers toward other models where they are still allowed 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