Published September 1997
| Submitted
Working Paper
Open
An Experimental Study of the Effect of Private Information in the Coase Theorem
- Creators
- McKelvey, Richard D.
- Page, Talbot
Chicago
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Abstract
This paper investigates, in an experimental setting, the effect of private information on the Coase theorem's predictions of efficiency and allocative neutrality. For a two-person bargaining game, we find significantly more inefficiency and allocative asymmetry in the case of private information compared with the case of complete information. We also find substantial bargaining breakdown, which is not predicted by the Coase theorem. For the case of private information, the Coase theorem does not predict as well as a generalized version of the Myerson-Satterthwaite theorem, which predicts inefficiency, allocative non-neutrality in the direction of the disagreement point, and some bargaining breakdown.
Additional Information
The financial support of the National Science Foundation (Grant #SBR-9223701} is gratefully acknowledged. We thank Eugene Grayver for writing the computer programs to run the experiments, and we thank Tony Lancaster and Pedro Gozalo for helpful comments. Published as McKelvey, R.D., & Page, T. (2000). An experimental study of the effect of private information in the Coase theorem. Experimental Economics, 3(3), 187-213.Attached Files
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Additional details
- Eprint ID
- 80364
- Resolver ID
- CaltechAUTHORS:20170814-133129502
- NSF
- SBR-9223701
- Created
-
2017-08-14Created from EPrint's datestamp field
- Updated
-
2019-10-03Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 1018