This paper develops an explanation of why bargainers often terminate negotiations in disagreement in spite of positive expected gains from continued negotiation. The key to the analysis is a model which embeds bargaining activity within a market. Agents are continually faced with the choice between continuing to bargain with an existing partner or searching for a new partner. Bargainers may then terminate negotiations without an agreement, in spite of positive expected gains from continued bargaining, because seeking a new bargaining partner promises a higher return.