Thus we cannot directly estimate the relationship between ask prices and sale prices.
In general, the search models predict that higher ask prices should indicate a willingness on the part of the seller to hold out for a higher offer.
We find that computers with high ask prices (relative to their value) receive fewer offers.
more idiosyncratic) markets, there is a positive relationship between ask prices and outstanding offers.
Using these data, we find that high ask prices extend time to sale and that the relationship is stronger in thinner market segments.
Our conclusion is that despite the prevalence of information in the market, ask prices play a role consistent with the predictions of search models.
In this section we discuss some models that explain a functional role for ask prices.
We should note first that in a perfect information setting with costless search, ask prices will play no functional role.
Models that incorporate ask prices into the search framework typically take two approaches, both of which involve justifying a negative relationship between the ask price and the arrival rate of buyers.