Theoretical and empirical analysis of the multiperiod pricing pattern in the real estate market

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Abstract

We examine empirically and theoretically the multiperiod pricing pattern in the real estate market. First, in a game theoretic framework, we identify conditions for determining whether potential closing prices increase or decrease and marginally increase with time on market. Then, by observing rental housing transactions, we empirically find evidence that the difference between the list price and the settlement price rises and marginally decreases with time on market. This empirical result is consistent with a perfect Nash equilibrium previously proposed in the model.

Original languageEnglish
Pages (from-to)95-107
Number of pages13
JournalJournal of Housing Economics
Volume11
Issue number2
DOIs
StatePublished - Jun 2002
Externally publishedYes

Keywords

  • Perfect nash equilibrium
  • Prices
  • Real estate
  • Time on market

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