Bargaining or
haggling is a type of
negotiation in which the buyer and seller of a good or service debate the price and exact nature of a transaction. If the bargaining produces agreement on terms, the transaction takes place. Bargaining is an alternative pricing strategy to
fixed prices. Optimally, if it costs the retailer nothing to engage and allow bargaining, he/she can divine the buyer's willingness to spend. It allows for capturing more
consumer surplus as it allows
price discrimination, a process whereby a seller can charge a higher price to one buyer who is more eager (by being richer or more desperate). Haggling has largely disappeared in parts of the world where the cost to haggle exceeds the gain to retailers for most common retail items. However, for expensive goods sold to uninformed buyers such as
automobiles, bargaining can remain commonplace.