I've known searches that produced ranked candidates who wanted higher starting salaries or start-up packages and rejected the job when they didn't get it. I've also known searches where the top ranked candidate probably wasn't serious about the application. But once offered a $15k/year increase or beaucoup research funds turned around, told his current dean about the offer, and settled for staying put in his old job with a salary increase that he'd previously asked for and hadn't received.
Conversely, there have been times when the dean knew that the candidates would say "no" to a lower salary and went with a lower-priced candidate. It's a matter of perspective.
Heck, even the announcement often is related to how much the job will pay. Once watched a senior faculty member who really wanted to move to a different institution apply for a "junior" grade salary. The search committee verified that he knew the salary he'd get, he was easily the top ranked candidate, and he bargained to get some fairly cheap senior-grade perks thrown in--office space, one-time funding to set up his research, changes in what resources the library would offer, getting some of his more advanced students funded. In other words, he was willing to offer his services at cut-rate prices.
So it happens. But it's not institutionalized, and that's probably appropriate for a medieval institution.
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