TY  - BOOK
AU  - Aivazian,Varouj A.
AU  - Callen,  Jeffrey L.
AU  - McCracken, Susan
TI  - Experimental tests of core theory and the coase theorem: inefficiency and cycling
SN  - 00222186
AV  - HB73 JOU 
PY  - 2009///
CY  - Chicago
PB  - University of Chicago Press
KW  - Bargaining
KW  - Bargaining theory
KW  - Coalition bargaining
KW  - Coase theorem
KW  - Experimentation
KW  - Linear regression
N2  - We examine experimentally the bargaining process and the final allocation of payoffs in games that differ in terms of whether the core exists and in the initial allocation of property rights among the players. This paper highlights the interaction among property rights, transaction costs, and the empty core. Our experimental results indicate that the existence of the core is an important determinant of bargaining generally and the Coase theorem in particular. They confirm our conjecture that when the core is empty and property rights are ill defined, Coasean efficiency breaks down. Among other results, our experiments show that the number of inefficient (non‐Pareto‐optimal) agreements and bargaining rounds with cycling are significantly greater when the core is empty than when the core exists, especially when property rights are ill defined. Our results suggest an economic role for specific property right arrangements to resolve the empty core
UR  - https://doi.org/10.1086/596562
ER  -