Dynamic Model for the Simulation of Equilibrium Status in the Land Use Market
This paper presents a dynamic equilibrium model for the real estate market. Households have stochastic behavior and compete for quasi-unique locations (real estate goods), which are assigned to the best bidder through an auction-type mechanism. The producers are modeled as maximizers of their profits over the long-term through the production of real estate assets, represented by the present value of future sales. It is assumed that the producers do not possess complete information about future levels of demand or prices. Rather, it is assumed that producers are myopic, meaning that they take the actual and historic prices in each period as the relevant information for their decision-making. A notion of equilibrium is used that adjusts prices given two situations: supply and demand surplus. In the supply surplus case, the prices are diminished and supply in the market is reduced until supply equals demand. In the case of demand surplus, the prices rise and demand diminishes (homeless households) until demand equals supply. This equilibrium condition yields prices that are jumpy over time, resembling observations of inventories in the real estate market and the manufacture industry. Copyright Springer Science + Business Media, LLC 2006
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Caballero, Ricardo J & Engel, Eduardo M R A, 1991.
"Dynamic (S, s) Economies,"
Econometric Society, vol. 59(6), pages 1659-86, November.
When requesting a correction, please mention this item's handle: RePEc:kap:netspa:v:6:y:2006:i:1:p:55-73. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.