The issue of choosing to sell property by auction or by traditional negotiated search markets is addressed in this article. A general selling institution called the slow Dutch auction is introduced. This general selling mechanism reduces to either a conventional auction, a posted offer, or some time dependent mix of these selling institutions depending on the pricing rule chosen by the seller. We model search by having potential buyers whose private valuation for the property is unknown to the seller arrive randomly over time. With this general framework the seller's problem is to choose a selling mechanism that maximizes expected wealth. Surprisingly, we find that the optimal selling institution is always a posted offer market. The seller chooses an optimal posted price and waits until a buyer arrives who is willing to pay this price. Auctions are never optimal.Key words: Real estate auctions, Search markets, Optimal auctions, Negotiated markets, Posted offer markets, Resolution trust corporation Real estate auctions in the United States have traditionally been conducted for distressed properties. As a result, these auctions are often associated with foreclosures and deteriorating properties. However, there has been much recent interest in real estate auctions as an alternative to brokered markets for nondistressed propreties. Recently, the Resolution Trust Corporation's (RTC) proposal to use auctions to sell residential and commercial real estate acquired through failed savings and loans has sparked much of this debate. There has also been a sharp increase in the number of residential properties sold by auction. Furthermore, auctions are frequently used as an alternative to brokered markets in other countries. For example, auctions comprise about one-half of residential real estate sales in Melbourne, Australia (Lusht, 1990).The use of real estate auctions to market properties raises some interesting issues regarding the relative merits of auctions versus traditional brokered sales. With an auction the seller knows that the property will be sold on a fixed date but loses control over the pricing of the property. By contrast, in traditional brokered markets, the seller retains control over pricing but loses control over the timing of the sale. The present study analyzes which market institution will generate the greatest present value for the seller. Is one institution always optimal, or do there exist conditions that suggest one selling institution is preferred in some situations but not in others?

Credit card minimum payments are designed to ensure that individuals pay down their debt over time, and scheduling minimum automatic repayments helps to avoid forgetting to repay. Yet minimum payments have additional, unintended psychological default effects by drawing attention away from the card balance due. First, once individuals set the minimum automatic repayment as the default, they then neglect to make the occasional larger repayments they made previously. As a result, individuals incur considerably more credit card interest than late payment fees avoided. Using detailed transaction data, the authors show that approximately 8% of all of the interest ever paid is due to this effect. Second, manual credit card payments are lower when individuals are prompted with minimum payment information. Two new interventions to mitigate this effect are tested in an experiment, prompting full repayment and prompting those repaying little to pay more, with large counter effects. Hence, shrouding the minimum payment option for automatic and manual payments and directing attention to the full balance may remedy these unintended effects.

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We study nudges that turn out to have precise null effects in reducing long‐run credit card debt. We test nudges across two field experiments covering 183,441 UK cardholders. Our first experiment studies nudges added to monthly credit card statements. Our second experiment studies letters and email nudges (separate from monthly statements) sent to cardholders who signed up to automatically pay the minimum required payment. In a follow‐up survey to our second experiment, we find that 96% of respondents underestimate the time it would take to fully repay a debt if the cardholder made only the minimum required payment. The nudges reduce this confusion, but underestimation remains overwhelmingly common.

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