The analytics of search with posted prices

This paper investigates the characteristics of the optimal posted price in the standard sequential search paradigm. Much of the intuition gleaned from the extensive sequential search literature in which the seller adopts a re servation price does not carry over to the posted price setting. For exampl e, an increase in buyer valuations can lead to a reduction in the optimal p osted price. We do, however, provide sufficient conditions on the hazard ra te function h which ensure that an increase in demand induces an increase i n the optimal posted price. As exhibited herein, the analysis of the posted price model depends critically upon analytical properties of h. Amongst th e issues treated are the elasticity of demand, finite horizon. sale of mult iple units, and competitive equilibrium.