Econometrica: Nov 2005, Volume 73, Issue 6

Behavioral Identification in Coalitional Bargaining: An Experimental Analysis of Demand Bargaining and Alternating Offers
p. 1893-1937

Guillaume Fréchette, John H. Kagel, Massimo Morelli

Alternating‐offer and demand bargaining models of legislative bargaining make very different predictions in terms of both ex ante and ex post distribution of payoffs, as well as in the role of the order of play. The experiment shows that actual bargaining behavior is not as sensitive to the different bargaining rules as the theoretical point predictions, whereas the comparative statics are in line with both models. We compare our results to studies that attempt to distinguish between these two approaches using field data, finding strong similarities between the laboratory and field data regardless of the underlying bargaining process.

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