We use a generalized version of the Myerson-Satterthwaite theorem to study inefficiencies in bilateral bargaining over trade of an indivisible good, where there is two sided private information on the valuations. We show that when preferences are convex and quasi linear, and when the private...

We investigate, in an experimental setting, the effect of private information on the Coase theorem's predictions of efficiency and allocative neutrality. For a two-person bargaining game, we find significantly more inefficiency and allocative bias in the case of private information compared with...

In laboratory experiments, information cascades are ephemeral phenomena, collapsing soon after they form, and them reforming again. The formation/collapse/reformation cycles occur frequently and repeatedly. Cascades may be reversed (collapse followed by a cascade on a different state) and more...