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An experimental study of the effect of private information in the Coase theorem

McKelvey, Richard D. and Page, Talbot (2000) An experimental study of the effect of private information in the Coase theorem. Experimental Economics, 3 (3). pp. 187-213. ISSN 1386-4157. https://resolver.caltech.edu/CaltechAUTHORS:20170828-152913455

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Abstract

We investigate, 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 bias 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, we reject the Coase theorem in favor of the alternative of a generalized version of the Myerson–Satterthwaite theorem, which predicts inefficiency, allocative bias in the direction of the disagreement point, and some bargaining breakdown.


Item Type:Article
Related URLs:
URLURL TypeDescription
https://doi.org/10.1007/BF01669772DOIArticle
https://link.springer.com/article/10.1023%2FA%3A1011481916758PublisherArticle
http://resolver.caltech.edu/CaltechAUTHORS:20170814-133129502Related ItemWorking Paper
Additional Information:© 2000 Kluwer Academic Publishers.
Subject Keywords:Coase theorem; Myerson-Satterthwaite theorem; two-person bargaining; private information; incomplete information; bargaining breakdown; cooperative and non-cooperative game theory
Issue or Number:3
Classification Code:JEL: C78, C92, D82
Record Number:CaltechAUTHORS:20170828-152913455
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20170828-152913455
Official Citation:McKelvey, R.D. & Page, T. Experimental Economics (2000) 3: 187. https://doi.org/10.1023/A:1011481916758
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80870
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:28 Aug 2017 22:34
Last Modified:03 Oct 2019 18:35

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