Weonomics

Weonomics. Noun. The study of peculiar Chilean economic behavior in business dealings.

There are some clear cultural difference between doing business in the US and in Chile. I’ve taken to calling it Weonomics. (Gringo readers, weon is the ubiquitous Chilean word meaning anything from dude to asshole.) Clearly not all Chileans subscribe to the principles of Weonomics, but I run into enough Weonomics experts each week that I felt I had to write about it. I have a feeling that most foreigners in Chile will identify with this post, but I’m also interested to see the response from Chilean friends. Please enjoy.

Negotiation

A typical US negotiation.

  • Seller asking price $45,000
  • My offer price: $37,000
  • Seller counteroffer: $43,000
  • My counteroffer: $39,000
  • Final price: $41,000

Pretty simple, right? A sales price, a counter offer and meet somewhere in the middle. You’d think negotiation would work similarly in any part of the world, but not with many Chileans.

Weonomics:

  • Seller asking price $45,000
  • My offer price: $37,000
  • Seller counteroffer: $48,000
  • My counteroffer: See ya!

Seriously? Who in their right mind thinks they’ll close a deal counteroffering by RAISING their initial price?  But this is a principal tenant of Weonomics. The worst case I’ve seen was when a friend was trying to purchase a house. The opening price was $140,000. My friend bid $120,000. The counter offer? $210,000. Weonomics at its finest.

Lowball/HighBall

Someone’s first offer is rarely close to a real offer. It’s almost always a borderline insultingly lowball offer, or a pie in the sky number that only an idiot would pay. A friend closed a deal with a major Chilean company that pays him $20,000 per month. Their first offer? $500 per month. Many Chilean real estate prices are listed above market value in hopes that someone will come along and just buy it. You’ll rarely find a business deal that’s priced to get a deal done quickly.

Meeting Cancellations and No Shows

I’ve been stood up more in the past six months that I ever have been in my entire life combined. I had a string of five meetings on monday and tuesday that all cancelled less than 30 minutes before the meeting was supposed to start. Two didn’t even show up at all. One of the no shows told me it was my fault because “maybe I didn’t understand spanish fully.” The only problem? She’d emailed me the day before explicitly setting the meeting. It was impossible to mistake. That’s Weonomics.

No/Yes

You rarely ever hear a true yes or no in Chilean business. Each answer can mean multiple things. See chart:weonomics

One time I ordered sushi for delivery on a national holiday. The person who answered the phone told me I shouldn’t order because it would be an hour and a half wait for my food. I thought about it, but put the order in anyway and made myself a small snack to tide myself over. 20 minutes later, my sushi arrived, just as I was finishing my snack. Her no, it’ll take too long, was simply trying to get out of more work. Weonomics at work.

So what do you think? Am I right? Do you notice any of these too? Or any other ones? Do you do them yourself? Or am I just un gringo que no cacha nada?

Hat Tip: Skinner Layne for originally coining the phrase.

  • http://exosphe.re/ Skinner Layne

    Life in the Chilean jungle

  • Jaime

    It happened to me when I found an apartment last december. The owner seemed really nice and commited to close the deal, I was ready to sign but suddenly she started to ask a lot more, and I was less than a month away from being homeless. Fortunately I found another one a few days later at the same price (and bigger!) and closed the deal in a few days, but as you said, it’s rare.

    The inability to say no is one of the worst things about our culture (I don’t know if it’s latam or just chilean). Video related: http://www.youtube.com/watch?v=OBSkLfVp2fQ

    • http://www.nathanlustig.com Nathan Lustig

      Hahaha, glad to know its not just us foreigners who deal with weonomics. Love the video.

  • Fernando Concha Grabinger

    I was really surprised reading your comments. I don’t know how many cases you are taking into consideration for making thoses statements. To be honest, I cannot completely agree on that, since I rather base my statements on objetive statistical data. I have never had an experience like that, but that doesn’t mean that many cases like that may occur. I have had very crazy experiences in the US, but would never make a generalization of that to the rest of North Americans naming it the “Gringo way” or other not so friendly denomination.

    • http://www.nathanlustig.com Nathan Lustig

      I’d be interested to hear what part of the post you don’t think is accurate. The yes/no is in most of the travel books about chile, a chilean who posted below had the same experience with negotiating and chileans are known for not showing up for meetings.

      The post is based on my own experience living and working in chile for the past two years. Other friends, both chilean and foreign, have seen similar behavior. I clearly state not all chileans behave this way, but a high enough percentage do that makes a post like this make sense.

      I would be completely happy if you wrote a post about your experience in the US. There’s all sorts of behaviors I take issue with that happen in my native land. I invite you to write something here in the comments. Feel free to call it the gringo way.

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  • Chris Leskovsek

    Yes, that is Chile at its finest. I’m a Chilean and I think your comments while being on the humorous side, are sad but true.

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  • Johannes Wilm

    It’s a difficult question. Certainly not everyone in one particular place is one particular way. Nevertheless, there are certain patterns of behavior that are more common in one place than another…
    While your observations may be quite right (I have more experience from other parts of Latin America where similar things happen), I think there is a general tendency of everyone to believe that their own way of doing things is “natural” and “straight-forward”. But if you take individual cases, you will notice it’s not always like that.
    For example — take the clock. Many Northern Europeans get angry when they are other places when people don’t show up on time and say things like “Why can’t things be as they are in Britain/Germany/Denmark/Sweden/Norway where 5 o’clock is 5 o’clock and no-one is ever late (without an excuse)?”

    Well… they may think it is that way, but it really isn’t. First of all there are many regional differences. In Denmark you send a text message when you are 5 minutes late for a meeting. In Berlin on the other hand, you can be 15 minutes late before you send a message. And the nature of the meeting is important as well. Business meeting: 5 minutes acceptable lateness. University (in Germany and Norway): 15 minutes. Meetings of voluntary organizations: 20 minutes. But while the 1 minutes at uni are 15 minutes exactly, the 20 minutes of organizations are more flexible: people attending for the first time can come early to have a word or two with the organizers. If the meeting is a party at night, one can be 5 hours late (if with friends) or 1-2 hours late (if business related), etc. etc. . It turns out that what seemed like a very easy and straightforward way of doing things to the European ends up being an extremely complicated set of conventions… that most foreigners will have some difficulty adapting to.

    Something to think about next time getting angry at Chileans doing things “all backward” :)

    • http://www.nathanlustig.com Nathan Lustig

      I don’t think Chileans do things “all backward” and its certainly easier to understand things if you grow up in a culture, but some things are empirical facts. For example, the yes/no, the negotiation don’t help anyone get things done.

      • Johannes Wilm

        For sure, but…
        1. After having been in Latin America for a while, I can feel some of that uneasiness about saying no myself. It has happened a few times to me now that I say “yes” to participating in something when I really didn’t want to. I don’t think it’s just me. We can all take in cultural traits from other areas, whether we want it or not. It’s hard to resist.
        2. “Yes” does not mean “yes” in the US. :) Not always anyways. As an exchange student in the South Carolina and later when living in Arizona, I discovered that a phrase such as “Let’s meet next week!” can mean things such as “I don’t have any time next week for you.” Or “I’m great!” can often mean “I’m miserable.” Especially the part about not being able to rely on appointments would drive me nuts… but that’s just culture I guess…