We compare equilibrium allocations in directed search models where prices are determinedalternatively by posting and by competing auctions, with the following results. With finite numbersof players, sellers’ expected payoffs are higher when all sellers auction than when all sellers post.This...

This paper develops a model of pricing and advertising in a matching environment with capacity constrained sellers and uncoordinated buyers. Sellers' search intensity attracts buyers only probabilistically through costly informative advertisement. Equilibrium prices and profit maximizing...

We consider a directed search environment where capacity constrained sellers reach uncoordinated buyers through costly advertising while buyers observed all prices probabilistically. We show that: (i) the equilibrium advertising intensity has an inverted U-shape in market tightness, (ii) the...