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- Title
MATCHING MODELS AND HOUSING MARKETS: THE ROLE OF THE ZERO-PROFIT CONDITION.
- Authors
Lisi, Gaetano
- Abstract
The recent and growing literature which has extended the use of search and matching models even to the housing market does not use the free entry or zero-profit assumption as a key condition for solving the equilibrium of the model. This is because a straightforward adaptation of the basic matching model to the housing market seems impossible. However, this short paper shows that the zero-profit condition can be easily reformulated to take the distinctive features of the housing market into account. Indeed, the zero-profit condition considers the possibility that a buyer can become a seller and vice versa, since it is used to find the equilibrium of the model where the transition process from seller (buyer) to buyer (seller) comes to an end.
- Subjects
HOUSING market; ECONOMIC equilibrium; HOUSING &; economics; REAL estate sales; REAL property acquisition
- Publication
Economic Research Guardian, 2013, Vol 3, Issue 1, p54
- ISSN
2247-8531
- Publication type
Article