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Yvain comments on Bargaining and Auctions - Less Wrong
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On the one hand, good point. On the other, it does seem like the $50 number plays an important role in negotiations, maybe because of the generalization to a marketplace, where dealers who sell for above $50 continue to be furniture dealers and are generally satisfied with the deal, but dealers who sell for under $50 go out of business. At the very least $50 makes a powerful Schelling point.
Negotiation is impossible in the underwater scenario.
(Edited to add: It is impossible for negotiation to result in profit for the dealer. The dealer can negotiate to minimize his loss, possibly by complaining about how much he originally paid for the table. In no event can he convince a buyer to pay $50 or more for a table that they value at $40 or less, assuming a completely idealized scenario.)