10/10

Strange name for an alley

The Bell Tower, Beijing

Lee, my dormmate, is having a lie-in. He’s earned it: he has spent the past two days haggling at the silk market. Given that he only has a few days in Beijing, this displays a mindboggling desire for knockoff shirts. Lee and his buddy Patrick are going RTW in 10 months. They have a spreadsheet that shows them where they will be and for how long. This all sounds great; maybe a couple of months in China, three months in India, three in Europe, couple in South America? No, these guys are doing the world. Five days in India, ten minutes in Amsterdam, a day in the UK. Lee complains that all of Asia has been the same: subtly distinct but much of a muchness. This is doubtless so but must impress you more that way if you are only in places very briefly and do not spare the time to soak in much flavour. Lee is a nice guy though, maybe a bit too nice. He doesn’t cuss (he is the only person I have ever met who says “shoot” and “freak”, which is sweeter than it sounds). And I don’t knock his plans: there are lots of ways to enjoy tourism (or travelling if you insist on calling it that). Some enjoy making it a trial of endurance, in which they try to spend as little as possible (these people I do not like — there is nothing more boring than traveller dicksizing over how small one’s budget is, or how one hitched from Lhasa to Chengdu and didn’t even give the lorry driver a few dollars towards his petrol, or how one beat some poor soul down to two yuan for that fake Cultural Revolution bag, and it gets worse: these are the fuckers who will “forget” their wallet when they have a beer with you or “borrow” 10 dollars of local currency and leave town without repaying it, and if anyone is going to steal your belongings in a dorm, the ethical, green as grass, peace-loving hippy is your man).

Sicheyuan doors

Me, I brought plenty of money, so I can take a taxi if I want to and I need not sweat every yuan. I don’t claim to be doing anything more than scratching the surface of a large, diverse country, but I am having a taste, sitting here in Tiananmen Square, enjoying the hazy autumn sun, on a beautiful day in Beijing, while Lee dreams of haggling his man down to a price he can get excited about telling the folks back home about.

Hutongs from the air

The Drum Tower, Beijing

The bell that once kept time for Beijing

Actually, I have been thinking about bargaining and why it is, if the locals love it so much, they do not spend much time doing it. The answer is clear. Price-setting works just as it does in any market. The seller is a profit-maximiser and wants as much as they can get for the goods. The buyer puts a value on the goods, and considers the opportunity cost over other uses for the money. So the seller wants A, the buyer wants to pay B. The market works on information. If the seller has good information about B, they will set A fairly close to it: it is no use expecting large profits if you know that the buyer does not value your goods highly enough to provide them. But with Europeans, the seller does not have good information about B. If they are very used to tourists, they know that it can be quite high. But here is the thing. With locals, each buyer’s B will be in a tight range, because each buyer knows what the goods are “worth” (and knows what a reasonable value for A would be). But Europeans do not know what the goods are “worth” and their own judgements can take a huge range. The seller does not know where on that range you will be, so bargaining consists of the seller’s naming a price at the top end of the conceivable range as they see it. For a local, this is close to A, and the buyer can say no, I’ll pay A, and the haggling is over. For the European, this can be very far from A, and worse, the European doesn’t even know what a good value for A would be! It is also hard to judge opportunity costs because they are not clear on what else they would do with the money. In most places, Lindy’s method of bargaining has worked well. She states her A, the price she will pay, and lets the seller take it or leave it. Here, she might need to allow a small adjustment upwards, because this permits the seller to feel they have squeezed extra profit from you.

The view from the Bell Tower