Bargaining and network structure: An experiment

Gary Charness, Margarida Corominas-Bosch, Guillaume R. Fréchette

    Research output: Contribution to journalArticle

    Abstract

    We consider bargaining in a bipartite network of buyers and sellers, who can only trade with the limited number of people with whom they are connected. We perform an experimental test of a graph-theoretic model that yields unique predictions about equilibrium prices for the networks in our sessions. The results diverge sharply depending on how a connection is made between two separate simple networks, typically conforming to the theoretical directional predictions. Payoffs can be systematically affected even for agents who are not connected by the new link, and we find evidence of a form of social learning.

    Original languageEnglish (US)
    Pages (from-to)28-65
    Number of pages38
    JournalJournal of Economic Theory
    Volume136
    Issue number1
    DOIs
    StatePublished - Sep 2007

    Keywords

    • Bargaining
    • Experiment
    • Graph theory
    • Network
    • Social learning

    ASJC Scopus subject areas

    • Economics and Econometrics

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  • Cite this

    Charness, G., Corominas-Bosch, M., & Fréchette, G. R. (2007). Bargaining and network structure: An experiment. Journal of Economic Theory, 136(1), 28-65. https://doi.org/10.1016/j.jet.2005.06.009