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Information and Competitive Equilibria in the Housing Market

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  • Soldatos, Gerasimos T.

Abstract

This paper derives necessary and sufficient conditions for the existence and occurrence likelihood of competitive equilibria in urban land and housing markets: (i) when there is imperfect information causing costly search trips and (ii) when land and housing are differentiated according to betweenzone and within-zone heterogeneity. Such competitive equilibria are contingent on the possibility that consumers spill over into the markets of less preferred zones. The main conclusions are that markets tend to be partitioned into homogeneous sub-groups and when they do not, heterogeneity may hamper the effectiveness of search and hence work against the existence of competitive equilibria.

Suggested Citation

  • Soldatos, Gerasimos T., 1990. "Information and Competitive Equilibria in the Housing Market," MPRA Paper 57629, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:57629
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    File URL: https://mpra.ub.uni-muenchen.de/57629/1/MPRA_paper_57629.pdf
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    References listed on IDEAS

    as
    1. Salop, Steven, 1976. "Information and Monopolistic Competition," American Economic Review, American Economic Association, vol. 66(2), pages 240-245, May.
    2. Alan Schwartz & Louis L. Wilde, 1982. "Competitive Equilibria in Markets for Heterogeneous Goods under Imperfect Information: A Theoretical Analysis with Policy Implications," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 181-193, Spring.
    3. Courant, Paul N., 1978. "Racial prejudice in a search model of the urban housing market," Journal of Urban Economics, Elsevier, vol. 5(3), pages 329-345, July.
    4. Steven C. Salop, 1976. "Information and monopolistic competition," Special Studies Papers 74, Board of Governors of the Federal Reserve System (U.S.).
    5. Yinger, John, 1981. "A Search Model of Real Estate Broker Behavior," American Economic Review, American Economic Association, vol. 71(4), pages 591-605, September.
    6. Blomquist, Glenn & Worley, Lawrence, 1981. "Hedonic prices, demands for urban housing amenities, and benefit estimates," Journal of Urban Economics, Elsevier, vol. 9(2), pages 212-221, March.
    7. M.J.H. Mogridge, 1985. "Transport, Land Use and Energy Interaction," Urban Studies, Urban Studies Journal Limited, vol. 22(6), pages 481-492, December.
    8. John F. McDonald, 1985. "Expectations and Urban Housing Prices," Urban Studies, Urban Studies Journal Limited, vol. 22(6), pages 543-549, December.
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    More about this item

    Keywords

    Housing; Between- and within-zone heterogeneity; Search costs; Competition;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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