In a bilateral monopoly, we are looking at the seller's incentives to propose an improved widget design under two different negotiation rules. With Renegotiation, the players negotiate a price after a design has been agreed upon, and with Commitment, they negotiate the price beforehand. The...

A mechanism with low direct cost of use may be preferred to alternatives implementing more efficient allocations. We show this experimentally by giving pairs of subjects the option to agree on a single average price for a sequence of trades - in effect pooling several small bargains into a...

We ask how bargainers' incentives to communicate about more efficient widget designs depend on whether they negotiate price prior to, or after, fixing the traded design. We find three effects: (1) Since communication reveals information about preferences, bargainers with little power prefer to...

Attempts to economize on bargaining costs imply that two parties may write a contract which is incomplete in the sense that each party tacitly cedes some decision rights to the other. If decision-makers can be disciplined by the threat of ex post renegotiation of decisions initially delegated to...

The article proposes a research program to compare game forms in terms of their ability to govern ex post adjustments to ex ante contracts. The comparisons can be based on direct implementation-costs or the extent to which desirable adjustments are not implemented. In several examples of the...