Abstract
An experimental bilateral bargaining mechanism is developed for use on a computer and then studied under two types of time constraint. First a single buyer and single seller are allowed to negotiate a market contract during one long experimental session. The relative Pareto optimality results of these negotiations are comparable to the benchmark Siegel and Fourakel bargaining experiments. Then, by shortening the time of each contract negotiation period and replicating these periods over one long experimental session, a multiperiod version of the bilateral mechanism is examined. Using this repetitive mechanism, the occurrence of an impasse as a bargaining tool becomes important. The multiple contract Pareto optimality results and multiple impasse occurrences are then compared to the original single contract results.
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