Equivalence of Auctions and Posted Prices

K.K. Kultti

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    Abstract

    We determine the equilibrium in two transaction mechanisms: auctions and posted prices. Agents choose whether to participate in markets where trades are consummated by auctions or in markets where sellers post prices. We show that the selling mechanisms are practically equivalent. Previous studies have shown that auction markets emerge as a unique evolutionary stable equilibrium when compared to bargaining markets. Posted price market dominate bargaining markets similarly.
    Original languageEnglish
    Place of PublicationTilburg
    PublisherCentER, Center for Economic Research
    Number of pages10
    Volume1997-57
    Publication statusPublished - 1997

    Publication series

    NameCentER Discussion Paper
    Volume1997-57

    Keywords

    • Auctions
    • posted prices
    • random matching.

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    Kultti, K. K. (1997). Equivalence of Auctions and Posted Prices. (CentER Discussion Paper; Vol. 1997-57). CentER, Center for Economic Research.