Bargaining under liquidity constraints: Experimental evidence

• 成果类型: Article
• 署名作者: Duffy, John; Lebeau, Lucie; Puzzello, Daniela
• 署名单位: University of California System; University of California Irvine; University of Osaka; Wellesley College; Indiana University System; Indiana University Bloomington
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2025.106035
• 发表日期: 2025
• 关键词: Bargaining; Monetary economics; Experimental economics

摘要

Bargaining is widely used in monetary, labor and finance models to determine terms of trade. The chosen bargaining solution can matter for welfare analysis, for example when agents are liquidity constrained. Here we report on an experiment in which buyers and sellers engage in semi-structured bargaining to determine the terms of trade with the aim of evaluating the empirical relevance of two bargaining solutions, the generalized Nash bargaining solution and Kalai's proportional bargaining solution. These bargaining solutions predict different outcomes when buyers are constrained in their money holdings. We first use the case when the buyer is not liquidity constrained to estimate the bargaining power parameter, which we find to be equal to 1/2. Then, imposing liquidity constraints on buyers, we find strong evidence in support of the Kalai proportional solution. Our findings have policy implications, e.g., for the welfare cost of inflation in search-theoretic models of money.