Asymmetric Information and Residential Entrepreneurs’ Choice on Provision of House Fittings

Rita Yi Man Li ()
Additional contact information
Rita Yi Man Li: Hong Kong Shue Yan University

Chapter Chapter 4 in Law, Economics and Finance of the Real Estate Market, 2014, pp 63-70 from Springer

Abstract: Abstract Running a real estate business is risky; it requires heavy capital investment in land, professional training and recruitment. Nevertheless, this huge expenditure does not guarantee a great return, and it is possible to suffer a substantial loss if the entrepreneur makes a wrong decision. Provision of home fittings is one of the risks that the housing entrepreneur faces. Some buyers dislike the fittings and thus decide not to purchase the home. In Hong Kong, land supply is scarce, but demand is huge (7 million people live in a small city with a hilly landscape). Land price occupies a relatively large proportion of the costs in dwelling production. Provision of a towel ring, washing basin, water closet, and other fittings only uses a small proportion of the total costs of construction. Besides, many developers have run their business for years and accumulated sufficient knowledge on buyers’ taste. Nevertheless, in mainland China, especially in areas of low land costs, costs of fittings have become relatively high. The risk of supplying fittings that prospective owners dislike is higher. Many entrepreneurs do not wish to take the risk. This chapter aims at reviewing the asymmetric information and risks that housing entrepreneurs face in mainland China and analysing entrepreneurs’ decision in response to this risk.

Keywords: Imperfect Information; Entrepreneurs; Residential fittings; Housing (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-3-642-54245-9_4

Ordering information: This item can be ordered from
http://www.springer.com/9783642542459

DOI: 10.1007/978-3-642-54245-9_4

Access Statistics for this chapter

More chapters in SpringerBriefs in Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().