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Can agents with causal misperceptions be systematically fooled?

Ran Spiegler ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Using data on house sales and inventories, this paper shows that housing-market dynamics are driven mainly by listings and less so by transaction speed, thus the decision to move house is key to understanding the housing market. The paper builds a model where moving house is essentially an investment in match quality, implying that moving depends on macroeconomic developments and housing-market conditions. The endogeneity of moving means there is a cleansing effect — those at the bottom of the match quality distribution move first — which generates overshooting in aggregate variables. The model is applied to the 1995–2004 housingmarket boom.

JEL-codes: J1 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2016-06-29
New Economics Papers: this item is included in nep-ure
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Downloads: (external link)
http://eprints.lse.ac.uk/86228/ Open access version. (application/pdf)

Related works:
Journal Article: Can Agents with Causal Misperceptions be Systematically Fooled? (2020) Downloads
Working Paper: Can Agents with Causal Misperceptions be Systemically Fooled? (2016) Downloads
Working Paper: Can Agents with Causal Misperceptions be Systematically Fooled? (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:86228

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