This models the hiring manager like he is a professor or judge of a competition. He isn't. He does not care about truth or light or merit or beauty, to a first approximation. He is just a corporate officer with a mandate to buy certain industrial inputs while staying within a budget.
He wants to purchase your services and makes a bid. That bid will virtually never consume the entire budget, because he has the rational expectation that he does not need to spend the entire budget to acquire your services.
You say "I will offer you my services, but the bid was too low." If he is still willing to purchase your services at the higher number, he accepts. Otherwise, a few words are exchanged, and he re-offers the original bid.
People make salary negotiation feel like it is a Greek tragedy. It is not. It is a routine financial transaction. The really big "but!" attached to that is that it is the routine financial transaction which will have the largest impact on your personal finances, by several orders of magnitude, at least until you decide to purchase property.
