Interdependence Effects of Housing Abandonment and Renovation
This study uses a methodology for analyzing the interdependence effects of abandonment and renovation for profit-maximizing landlords. After using a Prisonersâ€™ Dilemma game of abandonment to establish the existence of the interdependence phenomenon between internal rates of return, a Stackelberg framework is employed to model the interdependence effects of abandonment and renovation. The Stackelberg model appropriately defines the timing payoffs of the landlordsâ€™ operational decisions. This model shows that as long as one landlord does not abandon, the optimal decision for the other landlord is to renovate their property.
Volume (Year): 25 (2003)
Issue (Month): 4 ()
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