Student or Learner
Does "low-balling" refer to intentionally lowered product or sevice price like $8000 here to gain more profit by adding additional charges or the additional charges themselves like $100 tax and $200 for tires here?
40)Low-balling describes the technique where two individuals arrive at an agreement and then one increases the cost to be incurred by the other. For example, after the consumer has agreed to purchase a car for $8,000, the salesperson begins to add on $100 for tax and $200 for tires. These additional costs might be thought of as a metaphorical ‘low ball’ that the salesperson throws the consumer. One explanation for the effectiveness of low-balling is in terms of self-perception theory. When the consumer agrees to purchase the product under the original terms, that behavior might be used by the consumer to infer his sincere interest in the product. This inferred sincere interest in the product may enable him to endure the increased cost. An alternative explanation is in terms of impression management theory. If the consumer were to withdraw from the deal after the ‘slight’ change in the terms of agreement, he might foster the rather undesirable impression of being an irresponsible consumer unaware of these necessary charges.