Chris Blattman writes:

Strategy part 3: Figure out the national bargaining fraction. Anchor too low and some cabbies will simply stop talking to you. Unfortunately, that fraction is hard to predict. In Ethiopia, it seems to be about 70%. He’ll counter with 130% the target, and you get to the price you want in about two rounds. Very civilized. This, of course, is based on a sample of four. But my standard error is very low.

I especially love discovering the bargaining fraction and number of rounds in a country. Within a city it is surprisingly consistent, from taxis to markets. Cross-country variation is huge.

Based on travel this year, here is my guesstimation of starting fraction and rounds:

  • Ethiopia: 0.7 with 2 rounds
  • Argentina: no less than 0.9 and 1 round.
  • Canada: 1 and 0
  • Uganda: 0.5 and 4 rounds
  • Liberia: 0.1 and 8 rounds
  • Morocco: 0.001 and upwards of 754 rounds (including mint tea).

I don’t do that much exotic international travel, but I do recall in Singapore that there was no negotiation at all but still it was impossible to know what the fare was because the meter was programmed with all kinds of fixed charges, surcharges and variable mileage rates depending on time of day.  Plus major roads have tolls that are adjusted every second depending on traffic and the risk was born by the passengers.  So I would call Singapore a 1, -1.  (It was always dirt cheap in the end anyway.)

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