An Agent-Based Simulation of Rental Housing Markets
AbstractWe simulate a closed rental housing market with search and match- ing frictions, in which both landlord and tenant agents are imperfectly informed. Homogeneous landlords set rents to maximise revenue, using information on the market to estimate the relationship between posted rent and time-on-the-market (TOM). Tenants, heterogeneous in income, engage in undirected search accepting residences based on their idiosyn- cratic tastes for housing and a disagreement point derived from informa- tion on the distribution of oers. The steady state to which the simulation evolves shows price dispersion, nonzero search times and vacancies. The main results concern the eects of increasing information on either side of the market. When tenants see a greater percentage of the distri- bution of oers, tenants learn to refuse high rents and so the population rises and tenants' utilities rise as does overall welfare. Conversely, when landlords have less information, their utility can rise as over estimations in best posting rent move the market to higher rents.
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Bibliographic InfoPaper provided by Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure in its series Working Papers with number 0908.
Length: 27 pages
Date of creation: 2009
Date of revision:
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More information through EDIRC
Real estate; Rental markets; Search; Information; Simulation; Multi-agent systems;
Other versions of this item:
- John Mc Breen & Florence Goffette-Nagot & Pablo Jensen, 2009. "An Agent-Based Simulation of Rental Housing Markets," Post-Print halshs-00374157, HAL.
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Housing Supply and Markets
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
- Marcus Allen & Ronald Rutherford & Thomas Thomson, 2009. "Residential Asking Rents and Time on the Market," The Journal of Real Estate Finance and Economics, Springer, vol. 38(4), pages 351-365, May.
- John Mc Breen & Florence Goffette-Nagot & Pablo Jensen, 2011. "Information and Search on the Housing Market: An Agent-based Model," ERSA conference papers ersa11p1395, European Regional Science Association.
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