Economics, Econometrics and Finance
4 years ago

Bargaining and search costs drive price disparities in housing markets.

Price Dispersion in the Housing Market: The Role of Bargaining and Search Costs
Gaetano Lisi

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The housing market has different house prices because sellers and buyers have varying characteristics and spend time and money searching for the right deal. The final price is influenced by negotiations between the parties. This model explains why house prices differ.