Procedural Formalism and Social Networks in the Housing Market

Antoine Bonleu ()

No 1529, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: Why do some OECD countries have high levels of procedural formalism (PF) in the housing market? We provide an explanation based upon complementarities between the strength of social networks and the stringency of procedural formalism. The interest of social networks is that conflict resolution is independent of the law. When local people belong to social networks whereas foreigners do not, PF may facilitate housing search for locals at the expense of foreigners. To illustrate this mechanism we build a search-theoretic model of the housing market. The model emphasizes that the support for PF increases with the size of social networks, the default probability on the rent, the proportion of foreigners, and market tightness.

Keywords: housing market regulation; search and matching (search for similar items in EconPapers)
JEL-codes: R38 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2015-07
New Economics Papers: this item is included in nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Procedural Formalism and Social Networks in the Housing Market (2019)
Working Paper: Procedural Formalism and Social Networks in the Housing Market (2019)
Working Paper: Procedural Formalism and Social Networks in the Housing Market (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1529

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