The persistence of haggling is a puzzle with two competing hypotheses: Munger believes haggling persists because it benefits manufacturers (allowing higher average prices via discrimination), while Roberts speculates it may persist because it produces a lower average price by revealing the day-to-day P-star that firms couldn't accurately set in advance given inventory uncertainty.

causalpending

Speaker

Russ Roberts

Evidence Quote

your speculation was that haggling persists because people get a lower average price mine was because they get a higher average price that benefits the company I'd like to know what the truth is

Source

Michael Munger on Franchising, Vertical Integration, and the Auto Industry 06/22/2009EconTalk
Created: 6/17/2026, 10:31:26 AM

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