We study optimal dynamic selling mechanisms in a two-stage model where the buyer can search for a better price at the second stage. When this outside price is public, the optimal selling mechanism takes the form of a fixed first-stage price with price matching in the second stage. In contrast,...

Most markets clear through a sequence of sales rather than through a Walrasian auctioneer. Because buyers can decide between buying now or later, rather than only now or never, buyers' current 'willingness to pay' is much more sensitive to price than is the demand curve. A consequence is that...

The theory of competition as a discovery procedure argues that the results of this procedure cannot be predicted because of its very nature as a discovery procedure. If this were true, this would imply the impossibilty of testing whether competition actually works as predicted. This article...