%0 Report
        %A Lester, Benjamin R.
%A Visschers, Ludo
%A Wolthoff, Ronald P.
        %T Competing with Asking Prices
        %D 2013
        %8 2013 Jan
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 7163
        %U https://www.iza.org/index.php/publications/dp7163
        %X In many markets, sellers advertise their good with an asking price. This is a price at which the seller is willing to take his good off the market and trade immediately, though it is understood that a buyer can submit an offer below the asking price and that this offer may be accepted if the seller receives no better offers. Despite their prevalence in a variety of real world markets, asking prices have received little attention in the academic literature. We construct an environment with a few simple, realistic ingredients and demonstrate that using an asking price is optimal: it is the pricing mechanism that maximizes sellers' revenues and it implements the efficient outcome in equilibrium. We provide a complete characterization of this equilibrium and use it to explore the positive implications of this pricing mechanism for transaction prices and allocations.
        %K competing mechanism design
%K asking prices
%K auctions with entry
%K competitive search