What does contract negotiation look like when some parties hold private information and negotiation frictions are negligible? This paper analyzes the above question and provides a foundation for renegotiation-proof contracts in a related environment. The model extends the framework of the Coase...

We conduct a novel experimental test of the Coase conjecture using subjects' private information about preferences for fairness. In an infinite horizon bargaining game, a proposer proposes a division of chips, until a responder accepts. Given private information about fairness preferences and...