Bargaining refers to discussions or negotiations between individuals to agree on things such as prices, wages, working conditions, etc. One side usually attempts to gain an advantage over another to obtain the best possible agreement.

Before entering any bargaining process, an individual should ask three fundamental questions.

1. What do I want?

3. Why should the other party negotiate with me?

4. What are my alternatives?

Effective bargaining depends on one's bargaining style, goals, expectations, the other party's interests, listening skills, etc. One could approach the bargaining process by planning and preparation before one starts the process by getting as much reliable knowledge about the situation and other parties as possible, establishing rapport with the other party, exploring the issue, and attentively listening so that one can ascertain what the other side wants, and responding to the "signals" the other party sends through their conduct once bargaining gets underway by—after that, using influence, persuasion, concessions, and compromises to agree on a proposal acceptable to both parties.  

The use of leverage is an effective tool for bargaining. It may be noted that "leverage is based on perceptions, dynamic and is situation-specific" (Leverage: How to get and keep it any negotiation by Roger J Volkema). If a party to a negotiation has an advantage and nobody perceives that the benefit exists (including the person with the edge), then there is no leverage. This scenario is especially true for the party with the disadvantage. Perception is everything in bargaining, and influence is based on perception. Force can change quickly as new information becomes available. It is generally accepted that "knowledge is power," and nowhere is this truer than managing leverage. Information is the lifeblood of bargaining. The more information one has about the other party's needs or the availability of additional resource options, the stronger one's bargaining position.

While trying to gain an advantage, the parties often end up in a "win-lose" wherein one party wins while the other party loses. However, this does not result in a good deal, and trust between the parties is usually eroded. The best deals are "win-win" deals wherein both parties get favorable outcomes keeping the relationship intact.

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"Necessity never made a good bargain." -—BENJAMIN FRANKLIN

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