Sorting versus screening: Search frictions and competing mechanisms

Jan Eeckhout, Philipp Kircher

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

In a market where sellers compete by posting trading mechanisms, we allow for a general search technology and show that its features crucially affect the equilibrium mechanism. Price posting prevails when meetings are rival, i.e., when a meeting by one buyer reduces another buyer's meeting probability. Under price posting buyers reveal their type by sorting ex-ante. Only if the meeting technology is sufficiently non-rival, price posting is not an equilibrium. Multiple buyer types then visit the same sellers who screen ex-post through auctions. (C) 2010 Elsevier Inc. All rights reserved.

Original languageEnglish
Pages (from-to)1354-1385
Number of pages32
JournalJournal of Economic Theory
Volume145
Issue number4
DOIs
Publication statusPublished - Jul 2010

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