Minimum prices in a model with search frictions and price posting

- I study the effects of a minimum price on the market price distribution.
- The distribution will have a mass point at the minimum price and a gap around it.
- If the minimum price is sufficiently high, all sellers will post it.

In this paper I consider the effects of a minimum price (maximum wage) in a random search model with price (wage) posting. I show that with a minimum price, the price distribution will have a mass point. If the minimum price is sufficiently high, the price distribution will become degenerate.