Bilateral Bargaining in Markets

We present experimental data on a simple market game. Several solution concepts from cooperative game theory are applied to predict the observed payo ¤ distributions. Notably, a recently introduced solu-tion concept meant to capture the inuence of outside options on the payo ¤ distribution within groups fares better than most other solution concepts under consideration. Our results shed some light on the ef-fects of scarcity relations on markets on bargaining outcomes within negotiating dyads