Market Transactions through a Political Lens: Does Political Ideology Predict Price Negotiation

Abstract: Price negotiation is a universal behavior, prevalent in all cultures, yet it is marked by considerable heterogeneity. Why do some people always try to negotiate prices while others refrain from doing so? Six multi-method studies, including analysis of county-level real-estate transaction data, Google Search Trends data, and four pre-registered studies, reveal a robust association between political ideology and price negotiation propensity. Even after controlling for personal attributes such as age, gender, race, income, and education, political conservatives show a greater propensity to negotiate than liberals. Relatively to liberals, conservatives are more likely to endorse the free-market system and, therefore, are more likely to consider price negotiation as an injunctive norm. This normalization increases the perceived justifiability of price negotiations. More broadly, our results show that ideology can alter beliefs about how socioeconomic institutions work, which in turn can cause heterogeneity in behavioral norms.