Remember, the world is a souq - so play your part

It's always a souq, man." That was the exasperated comment from my friend Luke a couple of days ago as we were deep in negotiations with a trio of salesmen over my new car insurance policy. I bought Luke's used Mazda 3 a couple of weeks back and we were at the insurance company to switch the policy from his name to mine. He had coverage good for 13 months, and when he extended it recently the salesman assured him it would transfer with the car.

Of course, it could never be that simple. When we arrived at the office to make the switch, the same salesman, who kept popping Strepsils and coughing into a bundled tissue, looked balefully at my three-day-old UAE driving licence and then made a phone call. He nodded, hung up the phone and jotted a few numbers on a Post-it note that he then held up for us: "600 extra dirhams," he said. He explained, albeit with little conviction, that I was new to the country and thus a bigger safety risk.

I sighed and reached for my wallet, but Luke stopped me. He did not see the Dh600 quote as a flat rate based on established underwriting standards - it was merely the start of a negotiation. And he was right. The cost of virtually all goods and services is subject to haggling these days. As Sanam Islam points out in the cover story this week, an effective haggler can save a decent amount of money. But the truth is, most of us dicker over much more than just the bottom line.

In a study several years back, a group of American researchers with the University of Alabama identified three distinct "non-economic motivations for price haggling." The first is the need for achievement. This applies to those type-A overachievers who see everything as a challenge, as well as those with a bent toward self-righteousness. "These individuals, when faced with the feeling that a retailer is trying to take advantage of them, seek justice," the researchers observed, leaving me with the mental image of Batman arguing with a clerk over the price of a sweater.

The next group has a need for dominance. For them, haggling is not merely a friendly sport, but a venue to exert power, control, and for some men, virility. It is a battle of wills and a generally hostile experience. Not the most pleasant crew to join on a trip to the used furniture market. The last group does not see negotiation as a conflict at all, but rather a means of acceptance and belonging. They bargain with salespeople because they feel it is expected, simply part of the process, and even worry the salespeople will think poorly of them if they don't engage.

A subset of this group considers haggling a performance that if well-executed could impress friends and family. I suspect I belong in a fourth group, those who haggle only because we have to. Hailing from the sterile American suburbs, where prices are generally established in a corporate headquarters far away and not left to the local manager to adjust, I'm simply not very good at it. Not long ago, I travelled for the first time to Cairo, where haggling in the famed Khan al-Khalili bazaar is as much a part of the tourist experience as meeting King Tut.

I kept my guard up entirely for three hours as we strolled the shops, but then a chess board set caught my eye and the merchant persuaded me to retreat to his private workshop, down a dirt alley and away from the prying eyes of other vendors. He reached into a bag tucked away on a bottom shelf and pulled out a board he said was hand-carved from redwood, mahogany and camel bone. I liked it, I said. How much?

The man thought for a moment, then replied, "800 pounds," or about Dh535. I played my role, frowning as I mentally calculated how much to counter. "350 pounds," I said. The man threw up his arms as if he was truly offended. So after another 10 minutes or so of back and forth, my wife and l left. We got around the corner when we heard his voice echoing down the alley. "Hello, sir? ... Hello, sir? ... 350 is OK."

We felt victorious - until we learnt later from an unbiased party that we probably should have paid about 200. We felt worse when we discovered that the merchant didn't even include the chess pieces. Oh well, I'll always remember the dimly-lit corridors of the Khan al-Khalili when I play chess on that board. But the office of an insurance broker is not the Khan al-Khalili, and I left reminded how the customs that initially seem charming in a new place have a way of becoming tiresome when they are part of a daily routine.

After more than an hour of debate involving phone calls to outside parties, counteroffers and the intervention of two other salesmen, Luke succeeded in getting them to knock Dh100 off the quoted price. It's always a souq. [e-mail]