IDEAS home Printed from https://ideas.repec.org/a/taf/rjerxx/v35y2013i1p1-24.html
   My bibliography  Save this article

Hyperbolic Discounting, Reference Dependence, and its Implications for the Housing Market

Author

Listed:
  • Hua Sun
  • Michael Seiler

Abstract

The influential work of Genesove and Mayer (2001) uses loss aversion theory to explain several puzzling behaviors in the housing market. In this paper, we present an alternative theory, which does not require an asymmetric value function to observe the same “loss aversion” behavior. Specifically, this paper presents a model in which a reference-dependent home seller has a symmetric value function, but faces an inter-temporal decision problem. Furthermore, the framework of the model also helps explain the positive price-volume relationship and price dispersion effect, two observations that are well-documented in the housing market.

Suggested Citation

  • Hua Sun & Michael Seiler, 2013. "Hyperbolic Discounting, Reference Dependence, and its Implications for the Housing Market," Journal of Real Estate Research, Taylor & Francis Journals, vol. 35(1), pages 1-24, January.
  • Handle: RePEc:taf:rjerxx:v:35:y:2013:i:1:p:1-24
    DOI: 10.1080/10835547.2013.12091350
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10835547.2013.12091350
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/10835547.2013.12091350?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xin He & Zhenguo Lin & Yingchun Liu & Michael J. Seiler, 2020. "Search Benefit in Housing Markets: An Inverted U‐Shaped Price and TOM Relation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(3), pages 772-807, September.
    2. Florent Buisson, 2016. "Prospect Theory and Loss Aversion in the Housing Market," Journal of Real Estate Research, American Real Estate Society, vol. 38(2), pages 229-250.
    3. Hirota, Shinichi & Suzuki-Löffelholz, Kumi & Udagawa, Daisuke, 2020. "Does owners’ purchase price affect rent offered? Experimental evidence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 25(C).
    4. David M. Harrison & Michael J. Seiler & Liuming Yang, 2024. "The Impact of iBuyers on Housing Market Dynamics," The Journal of Real Estate Finance and Economics, Springer, vol. 68(3), pages 425-461, April.
    5. Florent Buisson, 2016. "Prospect Theory and Loss Aversion in the Housing Market," Journal of Real Estate Research, American Real Estate Society, vol. 38(2), pages 229-250.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rjerxx:v:35:y:2013:i:1:p:1-24. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rjer20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.