Theoretical and Empirical Analysis of the Multi-Period Pricing Pattern in the Real Estate Market

Posted: 28 Apr 2002

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Abstract

We examine empirically and theoretically the multi-period 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 supports a Perfect Nash Equilibrium previously proposed in the model.

Keywords: Real estate prices, time on market, Perfect Nash equilibrium

JEL Classification: D49, R21, R31

Suggested Citation

Ben-Shahar, Danny, Theoretical and Empirical Analysis of the Multi-Period Pricing Pattern in the Real Estate Market. Available at SSRN: https://ssrn.com/abstract=306535

Danny Ben-Shahar (Contact Author)

Tel Aviv University ( email )

Tel Aviv
Israel

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