Transition Dynamics in Equilibrium Search

We study a dynamic equilibrium search model where sellers differ in their urgency to liquidate an asset. Buyers strategically make price offers without knowing given seller’s urgency. liquidity and dynamics on the transition path after unexpected shock. Generically, includes phase all buyers offer same price, causing market collapse; however, dispersion resumes finite time, leading recovery both types sales. show that prices can overshoot before converging steady state. When relaxed randomly become desperate, dampening oscillations occur. (JEL C73, D11, D83)