Will_Sawin comments on Bargaining and Auctions - Less Wrong
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Comments (70)
I do agree that this introduces the BATNA situation later - but that's so general that I actually can't think of any reason that isn't considered "BATNA" for why the dealer should never accept less than $50. Maybe I just need to open up to more creative situations: the Mafia mob wants to keep table prices up and so threaten to shoot him if he sells it for less than $50; or the government decides that a fixed Table Tax was necessary so that each table was taxed $50 regardless of the price it was sold at; or he wants to signal that his goods are of high quality and so considers any price less than $50 to be too low for his store. Okay, on second thought this has turned into a pretty good example of why I should never say "I can't think of any examples" without at least first trying to think up some examples.
With regards to the Table Tax, what if there are storage costs to the table, so its value unsold is negative?