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|Title:||Optimal Pricing Strategy in the Case of Price Dispersion: New Evidence from the Tokyo Housing Market|
|Authors:||Deng, Y. |
|Citation:||Deng, Y., Gabriel, S.A., Nishimura, K.G., Zheng, D. (2012). Optimal Pricing Strategy in the Case of Price Dispersion: New Evidence from the Tokyo Housing Market. Real Estate Economics 40 (SUPPL. 1) : S234-S272. ScholarBank@NUS Repository. https://doi.org/10.1111/j.1540-6229.2012.00347.x|
|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. © 2012 American Real Estate and Urban Economics Association.|
|Source Title:||Real Estate Economics|
|Appears in Collections:||Staff Publications|
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