Equivalence of auctions and posted prices

We determine the equilibrium in two transaction mechanisms: auctions and po sted prices. Agents choose whether to participate in markets where trades a re consummated by auctions or in markets where sellers post prices. We show that the selling mechanisms are practically equivalent. Previous studies h ave shown that auction markets emerge as a unique evolutionary stable equil ibrium when compared to bargaining markets. Posted price markets dominate b argaining markets similarly. Journal of Economic Literature Classification Numbers: C78, C73, D44. (C) 1999 Academic Press.