Difference Between Negotiation and Bargaining

Bargaining

Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement. Bargaining is an alternative pricing strategy to fixed prices. Optimally, if it costs the retailer nothing to engage and allow bargaining, he 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.

Dickering refers to the same process, albeit with a slight negative (petty) connotation.

Bargaining is also the name chosen for the third stage of the Kübler-Ross model (commonly known as the stages of dying), even though it has nothing to do with price negotiations.


Negotiation


Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective advantage, to craft outcomes to satisfy various interests of two or more people/parties involved in a negotiation.

Negotiation is a process where one party involved in negotiating attempts to gain an advantage, not only for their own party, but also for at least one other involved party, by the end of the process. Its aim is distinct from that of compromise, in which more than one party suffers a net loss of goals or resources. Instead, basic negotiation is aimed toward efficiency in either resource distribution, goal and resource integration, or most commonly, both.

Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. The study of the subject is called negotiation theory. Professional negotiators are often specialized, such as union negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators, or may work under other titles, such as diplomats, legislators or brokers.

What is the difference between negotiation and bargaining?

Good negotiation actually either gets you to the point where you can bargain or better yet get you to the point where you don’t need to bargain at all. Bargaining is what people typically think of as haggling, point counterpoint or pushing back and forth in what many people look at as a zero sum game. Most people look at point counter point as being all that negotiation involves. What I want, what I’m unwilling to give up and what I’m willing to trade in order to get what I want.

Negotiation is a broader communication between two people that involves what influences the other side and what drives them. It’s asking open ended questions about what their motivations and goals are, the entire communication process around bargaining. Bargaining is a small subset of negotiation. Negotiation is a much broader idea. A negotiation is really any communication between two parties where you need or want the other party to do something.

You might communicate with them in a way that gets them to do something and because it’s not a request, they won’t have any idea that you influenced their decision. Negotiation is the process of influentially communicating in a way that prompts the other side to react. It’s communication that’s designed to provoke or create a response.

Negotiation is synonymous with navigation. We say the most dangerous negotiation is the one you don’t know you’re in. So if people don’t understand the difference between negotiating and bargaining someone could be negotiating with them in a way that influences their mindset.