2013
DOI: 10.1016/j.regsciurbeco.2013.03.001
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Asymmetric information and list-price reductions in the housing market

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Cited by 45 publications
(24 citation statements)
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References 26 publications
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“…2 Ortalo-Magné and Merlo (2004), using UK data, …nd that a lower asking price increases the number of visitors and o¤ers that a seller can expect to receive but decreases the expected sales price. Similarly, using Dutch data, De Wit and Van der Klaauw (2013) show that list price reductions signi…cantly increase the probability of selling a house. 3 While we assume limited commitment to the asking price, we do assume full commitment to the selling mechanism, which will be discussed below.…”
Section: Introductionmentioning
confidence: 91%
See 1 more Smart Citation
“…2 Ortalo-Magné and Merlo (2004), using UK data, …nd that a lower asking price increases the number of visitors and o¤ers that a seller can expect to receive but decreases the expected sales price. Similarly, using Dutch data, De Wit and Van der Klaauw (2013) show that list price reductions signi…cantly increase the probability of selling a house. 3 While we assume limited commitment to the asking price, we do assume full commitment to the selling mechanism, which will be discussed below.…”
Section: Introductionmentioning
confidence: 91%
“…The same argument used to show revenue and payo¤ equivalence when the set of potential buyers is …nite can be used to show that it holds in this case as well. 11…”
Section: Payo¤ Equivalencementioning
confidence: 99%
“…Recognizing that many real estate agents tend to focus on a pricing strategy (Benjamin and Chinloy, 2000) coupled with assumption that agents want to sell their entire inventory, agents have incentives to suggest list prices that promote faster sales Knight, 2002;De Wit and van der Klaauw, 2013). The unanswered question is whether the incentive to do so increases with greater inventory.…”
Section: Principal-agent Issues In Real Estate Brokeragementioning
confidence: 99%
“…The STAR model incorporates not only the housing structural attributes, but also the information concerning housing spatial neighbors when predicting the expected sales price of the subject property, which yields better predication precision as compared to the standard hedonic model. 4 Lastly, this paper complements the extensive existing literature on list-price revisions, for instance, Balvers and Cosimano (1990), Knight (2002), Herrin et al (2004), Yang and Ye (2008), Haurin et al (2010), Deng et al (2012), and De Wit and Van der Klaauw (2013). While these papers generally neglect the impact of potential loss on list-price updating process, we emphasize on the list-price revision revealed by sellers who face potential loss upon initial listing.…”
Section: Introductionmentioning
confidence: 77%
“…In general, list-price updating seems widely present in housing markets. De Wit and Van der Klaauw (2013) report that 20% of sellers update their initial list price in the Netherlands, Merlo and Ortalo-Magne (2004) report 23% for the UK, while Herrin et al (2004) and Knight (2002) report 37% and 38% 7 respectively for the U.S. Consequently, list-price cutting subsequent to the initial listing may potentially remove all of the effect of expected loss on the final list price.…”
Section: Literature Reviewmentioning
confidence: 99%