Bargaining in Israel - How to bargain in Israel as an exchange student

Term Paper 2010 10 Pages

Business economics - Offline Marketing and Online Marketing


Table of Contents

A) Israeli Culture of Market Bargaining

B) Hypothesis

C) Procedures utilized in the Experiment

D) Results

E) Conclusion

F) References

A) Israeli Culture of Market Bargaining

Haggling is considered an art in the Middle East. The unique approach of time and business relations is an unforgettable experience. Beside the idiosyncratic atmosphere in Jerusalem’s bazaar1, almost all shops in Israel, including grocery’s stores, offer the opportunity to bargain about prices. The Western rationale of “Time is money!” is in the Middle Eastern setting less valid than in Europe or America. Israeli sellers in return, easily perceive that their potential trading partner is in a rush and try to exploit this drawback by only presenting goods of a higher price class. Taxi drivers tend to exploit passengers, who are apparently unwilling to bargain a better price or simply leave and take another taxi, too. On the other hand, long term trading relationships are held in high esteem.2 It might pay, to build lasting relationships with the vendors in the local shouq, i.e. Hebrew for market. Even if it is merely about goods of a low value, such as groceries, nuts or spices, established trust facilitates transactions to both parties’ benefit.3

Against this backdrop, the question arises how it is possible to succeed in horse-trading in Israel. This paper tries to present a number of general strategies, schemes and settings about how to bargain in Israel. All methods mentioned in this paper were subject to a practical test in various shops and markets in Haifa.

B) Hypothesis

With the aid of the data collected, it is intended to analyze three main dimensions that affect bargaining in Israel: gender roles, environment/interaction and local support. First and fore- most, it is interesting to find out whether the gender of the participants in haggling has any ramification on outcomes. According to Kuhri, women are said to take more time in horse- trading than men and they do not necessarily produce better results.4 This claim is to be scru- tinized in the experiment described below. Secondly, a further pivotal dimension is the envi- ronment of the bargain. The question where the market place is situated has major ramifications on bargaining strategies. Is the market place in a central bus station, the old city or just a small shop? Ensuing from the setting of the transaction, the interaction of supply or collusion between sellers is an eminent factor to be taken into account. It is attempted to illustrate how this interaction impinges on the buyer’s strategy. Moreover, a mid-or long-term relationship between the buyer and seller can foster beneficial deals.5 Last but not least, local support and sources of information play an overriding role. It goes without saying that additional information is always beneficial to shore up bargaining power. In the subsequent analysis, however, the authors tried to test to what extent local support is able to gloss over weaknesses, such as a difficult haggling environment, e.g. in an air-conditioned shop.

The following section presents the bedrock of the experiment and the procedure used to extract data about these three main dimensions.

C) Procedures utilized in the Experiment

The authors set out to bargain of a game of chess-backgammon in Haifa downtown. In this experiment the subsequent strategies were utilized. It is vital for the ensuing analysis to keep these settings in mind:

1. Male tourist (student) little Hebrew knowledge: Willing to pay a certain sum.
2. Male and female couple (Hebrew fluent): male want to buy, female discourages male from purchase.
3. Male Hebrew speaker (student): aggressive, Israeli kind of bargaining.
4. Female Hebrew speaker: offering fixed price strategy (could not be tested due to sick ness)

After every bargaining attempt, we conferred and reported the behavior of all involved par- ties. This process enabled the authors to isolate pieces of information about the three dimensions mentioned in the hypothesis. The following section presents the results, starting with female bargaining.

D) Results of the Experiment

1. Female Bargaining

As well known, it is harder for a woman to bargain as for a man. But why is it like that? Women are much softer and say much faster yes to something that is offered to them than a man. In this case, it is the price. Women will never have the guts to start to bargain from a ridiculous low price. For a woman it seems to be embarrassing to offer a too low price, al- ready the fact makes a woman feel uncomfortable. A woman will never go to a shop and will have a bargaining strategy on her mind. Maybe she will ask for a discount, but she will do it nicely and quiet. She will ask for a price that seems to be justified for that certain product in her eyes. Is the price reached, she will stop bargaining, buy the product and go home happy. The man, by comparison, will first stop bargaining when he will be sure, that there ist no more chance to get a lower price, when the vendor won’t be willing to grant him any more discount at all. Maybe this is the reason why males get paid more than 20% less than their female colleagues. In the experiment, female bargaining, as an artificial obstacle in the couple setting, did nothing to improve the outcome of the bargain. For single female bargaining, ex- ternal factors impeded the authors from collecting commensurate data.6 There remains a re- mark from own experience that women are not necessarily the worse bargainers. However, females tend to be more vulnerable to buy additional items that were not defined as target when they set out for a specific deal.

It goes without saying that there are socio-cultural differences as well. The bargain culture depends a lot on education, social orientation and origin. For instance, women from Latin America are supposed to have a far better record in bargaining than their European counter- parts.


1 See Friedman, p. 1.

2 See Kuhri, p. 699.

3 Ibd. p. 704.

4 Ibd. P. 704.

5 This preeminent dimension can be either seen as outward environment or local support. For the subsequent analysis, we chose the latter, assuming good relations pave the way win-win outcomes.

6 See Procedures utilized in the Experiment: 4. Female Hebrew speaker, p. 4.


ISBN (eBook)
ISBN (Book)
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997 KB
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Institution / College
University of Haifa
Game Theory Field Study Middle East Israel



Title: Bargaining in Israel - How to bargain in Israel as an exchange student