What affects customer success when bargaining for a new car? Some empirical evidence

Ofer Azar

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2012, vol. 41, issue 1, 26-30

Abstract: Data about 233 new car models were collected, and a measure of customer success in bargaining for a new car (alpha) was created by computing the ratio between the discount received on the manufacturer's suggested retail price (MSRP) and the negotiable range (MSRP−dealer's car cost). One hypothesis was that customers who purchase more expensive cars succeed less in bargaining because of their higher time value. A second hypothesis was that a positive correlation between the negotiable range and alpha should exist, because of either customer incentives to bargain or dealer's bargaining strategy. Both hypotheses were supported by the data.

Keywords: Car dealers; Bargaining; Negotiations; Automobile industry; Consumer behavior (search for similar items in EconPapers)
JEL-codes: C78 D40 L81 L92 M31 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:41:y:2012:i:1:p:26-30

DOI: 10.1016/j.socec.2011.10.007

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