Nash-Bargained Consumption Decisions: A Revealed Preference Analysis

We present revealed preference characterisations of Nash-bargained consumption decisions in a two-player game. Our main analysis focuses on the symmetric Nash-bargaining solution with observed threat point bundles. However, we also present the testable implications of the generalised Nash-bargaining solution and the settings in which threat point bundles are not observed. We illustrate the practical usefulness of these conditions by means of an application to experimental data, which provides a first empirical test of the Nash-bargaining model on consumption data. © 2012 Royal Economic Society.