We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Optimal Pricing Strategy in the Case of Price Dispersion: New Evidence from the Tokyo Housing Market.
- Authors
Deng, Yongheng; Gabriel, Stuart A.; Nishimura, Kiyohiko G.; Zheng, Diehang (Della)
- Abstract
We adopt a multistage search model, in which the home seller's reservation price is determined by her or his opportunity cost, search cost, discount rate and additional market parameters. The model indicates that a greater dispersion in offer prices leads to higher reservation and optimal asking prices. A unique dataset from the Tokyo condominium resale market enables us to test those modeled hypotheses. Empirical results indicate that a one percentage point increase in the standard deviation of submarket transaction prices results in a two-tenths of a percent increase in the initial asking price and in the final transaction price. Increases in the dispersion of market prices enhance the probabilities of a successful transaction and/or an accelerated sale.
- Subjects
TOKYO (Japan); JAPAN; HOUSING market; HOUSING development; HOME prices; MARKET pricing; OPPORTUNITY costs
- Publication
Real Estate Economics, 2012, Vol 40, pS234
- ISSN
1080-8620
- Publication type
Article
- DOI
10.1111/j.1540-6229.2012.00347.x