Merchants don't like it when you insult their heritage, clothes or building, and will charge you higher prices for their goods.
This is actually such a perfect encapsulation of the Elder Scrolls experience. The pursuit of a kind of "realism" that's constructed entirely independently of any concerns for game design or player motivation. You can insult a merchant because you could in theory do that in the real world, and they will get pissed off at you inasmuch as that's expressible through game mechanics. The question of why a player would ever want to do this is totally irrelevant; these games see the idea of role-playing as a kind of simulation rather than part of the challenge of accomplishing the goals of the game. It's almost an admirable purity of purpose, at the same time as it's also totally deranged.
There's probably a contrast to be drawn here between this approach to the idea of "role-playing" and the Japanese industry's focus instead on intrinsically aligning your mechanical actions as a player seeking to beat the game with the role the story is asking you to play, but I'm not enough of an RPG gamer to elaborate further than that.
