Unhaggle: Putting Customers in the Driver's Seat

Unhaggle is a business model that uses a website to link up consumers with auto-dealers. The consumer describes the sort of vehicle they are looking for and the dealers compete to serve the consumer at the lowest possible price. The case illustrates how power in a negotiation comes from demand and supply. By bringing dealers to the consumer, Unhaggle helps drive down the cost of the vehicle to the consumer while reducing the dealer’s marketing costs. The case thus illustrates how technology changes a business, and specifically what players hold the power in a market. This case can also be used to illustrate a multi-player prisoner’s dilemma. Doing so involves arguing that dealers collectively would be better off if they refused to join Unhaggle’s dealer’s network (all would gain higher margins) but any individual dealer has an incentive to defect and join in order to gain access to Unhaggle’s consumers.