  This paper investigates the effects of a low bound price. To do so, a popular
and empirically proven model (Stahl (89') \cite{Stahl89}) is used. The model is
extended to include an exogenously given bound on prices sellers can offer,
excluding prices below such bound. The finding are rather surprising - when the
bound is set sufficiently high expected price offered (EPO) by sellers drops
significantly. The result seem to be robust in the parameters of the model, and
driven by the information provided to consumers by such legislation step: when
the limitation is set at sufficiently high levels all consumers anticipate the
bound price, and searchers reject any price above it. As a result sellers offer
the bound price as a pure strategy.

Computer Science and Game Theory