An experimental analysis of the impact of intermediaries on the outcome ofbargaining games

We conduct an experimental analysis of the bargaining between a buyer and a seller of the exchange of a single good by means of an intermediary or bro ker. We examine how an intermediary affects the price, the likelihood of a successful negotiation, and the time it takes to complete a negotiation. We first examine the impact of the intermediary as a pure middleman, and then as an information source about the distribution of seller and buyer reserv ation prices. The results show that an intermediary, whether or not informe d, increases the sale price, reduces the likelihood of an agreement. and in creases the time to reach an agreement (though the number of bargaining rou nds declines). The results suggest that the benefits of brokerage may be pr edominantly in the matching of buyers and sellers rather than in facilitati ng bargaining.