The Impact of Rent Controls in Non-Walrasian Markets: An Agent-Based Modeling Approach
AbstractWe 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.
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Bibliographic InfoPaper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2004-05.
Length: 57 pages
Date of creation: Dec 2004
Date of revision: May 2005
Publication status: published in Journal of Regional Science, August 2006, 455-492.
Other versions of this item:
- Ralph Bradburd & Stephen Sheppard & Joseph Bergeron & Eric Engler, 2006. "The Impact Of Rent Controls In Non-Walrasian Markets: An Agent-Based Modeling Approach," Journal of Regional Science, Wiley Blackwell, vol. 46(3), pages 455-491.
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Housing Supply and Markets
- R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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