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Cover of: Comparison of Auctions and Posted Prices in a Finite Random Matching Model
Klaus Kultti

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

Section: Articles
Volume 159 (2003) / Issue 3, pp. 457-467 (11)
Published 09.07.2018
DOI 10.1628/0932456032954783
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Summary
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.

Transition: The Resurgence of Barter.