Searching on a Deadline
We analyze an equilibrium search model where the buyer seeks to purchase a good before a deadline. The buyer's reservation price rises continuously as the deadline approaches. A seller cannot observe a potential buyer's remaining time until deadline, and hence posts a price that weighs the probability of sale versus the profit once sold. The model has a unique equilibrium, which can take exactly one of two forms. In a late equilibrium, buyers initially forgo any purchases, only accepting some offers as the deadline draws near. In an early equilibrium, buyers are willing to accept some offers even as they enter the market. Equilibrium price dynamics are determined by the concentration of buyers near their deadline, as well as their urgency of completing the transaction before their deadline.
|Date of creation:||2011|
|Date of revision:|
|Publication status:||Forthcoming: Under Review|
|Contact details of provider:|| Postal: P.O. Box 248126, Coral Gables, FL 33124-6550|
Phone: (305) 284-5540
Fax: (305) 284-2985
Web page: http://www.bus.miami.edu/faculty-and-research/academic-departments/economics/index.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Louis L. Wilde & Alan Schwartz, 1979. "Equilibrium Comparison Shopping," Review of Economic Studies, Oxford University Press, vol. 46(3), pages 543-553.
- Ma, Ching-To Albert & Manove, Michael, 1993.
"Bargaining with Deadlines and Imperfect Player Control,"
Econometric Society, vol. 61(6), pages 1313-39, November.
- Ching-to Albert Ma & Michael Manove, 1991. "Bargaining with Deadlines and Imperfect Player Control," Papers 0007, Boston University - Industry Studies Programme.
- Horowitz, Joel L, 1992. "The Role of the List Price in Housing Markets: Theory and an Econometric Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(2), pages 115-29, April-Jun.
- S. Nuray Akin & Brennan Platt, 2012.
"Running Out of Time: Limited Unemployment Benefits and Reservation Wages,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 149-170, April.
- S. Nuray Akin & Brennan Platt, 2011. "Code and data files for "Running Out of Time: Limited Unemployment Benefits and Reservation Wages"," Computer Codes 10-201, Review of Economic Dynamics.
- James Albrecht & Axel Anderson & Eric Smith & Susan Vroman, 2007. "Opportunistic Matching In The Housing Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 641-664, 05.
- Adam Copeland & Wendy Dunn & George Hall, 2011. "Inventories and the automobile market," RAND Journal of Economics, RAND Corporation, vol. 42(1), pages 121-149, 03.
- Rafael Rob, 1985. "Equilibrium Price Distributions," Review of Economic Studies, Oxford University Press, vol. 52(3), pages 487-504.
- van den Berg, G., 1987.
"Nonstationarity in job search theory,"
c2b931bf-9cce-4bae-929c-b, Tilburg University, School of Economics and Management.
When requesting a correction, please mention this item's handle: RePEc:mia:wpaper:2011-11. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher Parmeter)
If references are entirely missing, you can add them using this form.