The Impact of Rent Controls in Non-Walrasian Markets: An Agent-Based Modeling Approach

Ralph Bradburd, Stephen Sheppard, Joseph Bergeron and Eric Engler
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Ralph Bradburd: Williams College
Joseph Bergeron: Williams College
Eric Engler: Williams College

No 2004-05, Department of Economics Working Papers from Department of Economics, Williams College

Abstract: We use agent-based models to consider rent ceilings in non-Walrasian housing markets, where bargaining between landlord and tenant leads to exchange at a range of prices. In the non-Walrasian setting agents who would be extramarginal in the Walrasian setting frequently are successful in renting, and actually account for a significant share of the units rented. This has several implications. First, rent ceilings above the Walrasian equilibrium price (WEP) can affect the market outcome. Second, rent ceilings that reduce the number of units rented do not necessarily reduce total market surplus. Finally, the distributional impact of rent controls differs from the Walrasian setting.

JEL-codes: L51 R31 R52 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2004-12, Revised 2005-05
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Published in Journal of Regional Science, August 2006, 455-492.

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Journal Article: THE IMPACT OF RENT CONTROLS IN NON‐WALRASIAN MARKETS: AN AGENT‐BASED MODELING APPROACH (2006)
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