Protocol for inexperienced Coasean bargainers confronting delay costs

Delay costs can affect the efficiency of the private resolution of environm ental conflict between citizens who have minimal experience with Coasean-st yle bargaining, Using a laboratory experiment, this note examines whether t wo bargaining protocols - extensive form offers/counteroffers and cheap tal k - can act as a substitute fur bargaining experience. Our results suggest cheap talk was effective, bur the extensive form protocol was not. Cheap ta lk reduced efficiency losses in two of three protocol designs by nearly 100 percentage points, an increase comparable to the gains achieved with exper ience. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classificati on: C7; C9; Q2.