Data and Code for: Gotta Have Money to Make Money? Bargaining Behavior and Financial Need of Microentrepreneurs

Principal Investigator(s): View help for Principal Investigator(s) Morgan Hardy, New York University Abu Dhabi; Gisella Kagy, Vassar College; Lena Song , New York University

Version: View help for Version V1

Name	File Type	Size	Last Modified
ReplicationPackage V2			08/12/2021 02:33:PM

Project Citation:

Hardy, Morgan , Kagy, Gisella, and Song , Lena . Data and Code for: Gotta Have Money to Make Money? Bargaining Behavior and Financial Need of Microentrepreneurs. Nashville, TN: American Economic Association [publisher], 2022. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2022-02-22. https://doi.org/10.3886/E136721V1

Project Description

Summary:

Bargaining over real prices with microenterprise owners in Ghana, we show that sellers with less per capita household liquidity agree to lower sale prices. This relationship is robust across firms and within firms over time, even after controlling for a plethora of time-varying observables. A computerized bargaining experiment, with randomized initial payout sizes, corroborates the real-bargaining findings. This pattern can be explained by an application of classical bargaining theory that includes endowments and utility functions with decreasing absolute risk aversion. The potential poverty multiplying implications of pricing behavior is a key frontier in understanding barriers to the profitability of microenterprises.

Scope of Project

JEL Classification:
      C78 Bargaining Theory; Matching Theory
      D22 Firm Behavior: Empirical Analysis
      O12 Microeconomic Analyses of Economic Development

Geographic Coverage: Ghana

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Published Versions

V1 [2022-02-22]

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