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Directed Search in the Housing Market

Susan Vroman (), Pieter Gautier () and James Albrecht ()

No 372, 2007 Meeting Papers from Society for Economic Dynamics

Abstract: We consider a housing market with large numbers of buyers and sellers. Sellers differ in their reservation prices; buyers are ex ante identical. In the first stage of the game, each seller posts an asking price. Next, each buyer, after observing all asking prices, chooses a house to visit. Upon visiting a house, a buyer observes an idiosyncratic value, x, the maximum amount he would be willing to pay for the house. The buyer then decides whether to make a bid on the house and, if so, at what level. If only one buyer makes an offer on a house, the buyer and seller negotiate over the price with the seller’s asking price as a maximum. If more than one buyer makes an offer on a house, the buyers can engage in Bertrand competition. We analyze the equilibrium of this directed search game.

Date: 2007
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Related works:
Journal Article: Directed Search in the Housing Market (2016) Downloads
Working Paper: Directed Search in the Housing Market (2013)
Working Paper: Directed Search in the Housing Market (2010) Downloads
Working Paper: Directed Search in the Housing Market (2010) Downloads
Working Paper: Directed Search in the Housing Market (2009) Downloads
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More papers in 2007 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
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