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... Museum endowment was $4.9 billion and the museum needed to spend 4.25% ($208 million) during the year or risk its tax exemption. Spending $208 million on art in one year could be difficult given that amount is larger than most museums’ total endowment. Our model suggests that the museum may optimally pay a premium for art when the deadline is looming.2 Our first empirical contribution speaks to a prior literature including Hardin and Wolverton (1999), 1 Search in the presence of deadlines is also a feature of labor market models where unemployment benefits are withdrawn after a deadline. See Akin and Platt (2011) for a survey of the labor market findings. 2 In 2010 the Getty Museum beat five other bidders to buy Turner’s “Modern Rome—Campo Vaccino” for nearly $50 million, setting a record for the British artist’s paintings. 4 Lambson, McQueen and Slade (2004), and Ling and Petrova (2009) that generated seemingly implausible REIT premiums. For example, Lambson, McQueen and Slade (2004, p. 110) use a hedonic model that finds, “for REITs, the overpayment is substantial; 31.52% on average…” Using commercial real estate transactions, we find that the extant hedonic pricing models contain an unobserved expl...

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...red. In the early equilibrium, however, a longer grace period encourages slower acceptance and thus greater deadline concentration. Ironically, this allows for higher prices in equilibrium. The technical challenge of this model is that the distribution of seller’s asking prices is endogenously determined. We overcome this by translating equilibrium conditions into a differential equation which is analytically solvable. van den Berg (1990) implemented this approach for unemployment search with an exogenous wage distribution. Its first application with an endogenous wage distribution appears in Akin and Platt (2011). There, unemployed workers receive unemployment insurance benefits for a finite duration, after which they are cut off. This creates ex-post differences among the workers’ reservation wages, which allows firms to offer these otherwise identical workers different wages. We proceed as follows: Section 2 presents the baseline model and defines equilibrium. In Section 3, we walk through the process of translating the equilibrium conditions, and present the equilibrium solution. Section 4 summarizes and provides intuition for comparative statics. Section 5 extends the model for more general applic...

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...not honor previous quotes (Akin and Platt, 2014). In our model, buyers value the good identically, but their differing deadlines create a continuum of dispersed prices (as it did for labor markets in =-=Akin and Platt, 2012-=-). Also, the preceding papers are confined to retail sellers; we provide the first analysis of price dispersion in an auction environment.8 4This literature also focuses on online auctions in particul...