Comparison of Auctions and Posted Prices in a Finite Random Matching Model

Klaus Kultti ()

Journal of Institutional and Theoretical Economics (JITE), 2003, vol. 159, issue 3, 457-467

Abstract: I determine the steady state equilibrium in a random matching model with a finite number of buyers and sellers. Two trading mechanisms, namely, auctions and posted prices are compared. Auctions depict a situation where the sellers are unable to commit to a reserve price, whereas posted prices depict a situation where the sellers commit to a publicly announced price. In the corresponding infinite agent model the two mechanisms are equivalent, while in the finite case posted prices are preferred by sellers and auctions by buyers.

JEL-codes: D44 J41 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (2)

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