How much for the stolen TV?

Please allow myself to introduce myself. My name is Timothy Reeve-Newson. Despite my accent, I'm a product of Toronto, Canada. I've been living in Saga city a chest hair short of 2 years. For those who know me, know I'm quite shy so I'll stay out of personal stuff, at least for now.

"Bargaining has more to do with psychology than economics." -T. Reeve-Newson June 2006

A friend who used to redistribute stolen goods would always say before he bought a product "ohhh, uhhh, naaaaa. I can't get rid of that. No no. Look! It's old and has scratches. Is that a blood stain? mmmmm I'll do you a favour and take it off your hands for 20 bucks." What he was doing was trying to lower the seller's reservation price.


Theoretically, the reservation price is the maximum price a buyer is willing to pay for good or service, or the minimum price a seller is willing to accept for a good or service. Reservation prices vary for the buyer according to their disposable income, their desire for the good, and the prices of and their information about substitute goods (Wikipedia). Any price in between is a good deal!

Before you go to buy something, you usually have an idea of the very most you will pay. You rarely, if not never, know how little the other person will sell it for. But right off the bat, if you can get the seller to lower his or her reservation price (make them mentally under-value the good), you have a better chance of bargaining for a lower price.

In the above example, my friend's apparent lack of confidence in being able to resell the merchandise would have two complimenting effects (almost one in the same actually), 1) make the seller lower his reservation price and 2) be more susceptible to accepting a lower bargained price. The seller could have gone into the my friend's garage thinking I will accept no less than $50 for this beautiful TV. But he probably left thinking thank god I got ride of the piece of crap for $20 bucks.

The point is if you seem overly-interested in buying something, then that signals to the seller that you are willing to pay more for it, thus him or her charging you more. It's called capturing the consumer surplus. BTW, if you're unsure how much to sell/pay for a stolen TV, 1/3 the original price is rule of thumb.


A good salesman will always raise your reservation price, similar to how our Thai friend yesterday made us over-value the batik. When you call Del to buy a laptop, one of the first things the salesman will ask you is your budget (quote from Jon "the shark" Green). Once he's added the cost of all the extra features you initially never wanted, you'll end up buying a product for 10% more than what you originally wanted to spend. You, the buyer, will rationalize it as "oh, well it's only an extra $200. And look at what I get for it!" Moral: always under-play what you actually want to spend. And don't shop at Del, I heard their computers are shit.