Please use this identifier to cite or link to this item: https://doi.org/10.1016/j.jhe.2009.02.001
Title: Property appraisal in high-rises: A cooperative game theory approach
Authors: Ben-Shahar, D.
Deng, Y. 
Sulganik, E.
Keywords: Appraisal
Cost allocation
D63
High-rises
R31
R32
Shapley value
Story
Issue Date: 2009
Source: Ben-Shahar, D.,Deng, Y.,Sulganik, E. (2009). Property appraisal in high-rises: A cooperative game theory approach. Journal of Housing Economics 18 (1) : 25-33. ScholarBank@NUS Repository. https://doi.org/10.1016/j.jhe.2009.02.001
Abstract: The construction of the higher stories in a building is utterly contingent upon the construction of the lower ones, while the construction of lower stories does not require the construction of the higher ones. This rationale underlies our adoption of a cooperative game theory methodology for examining the value of units based on the cost approach of land appraisal. Particularly, we propose the Shapley value solution to examine the allocation of the land and construction cost among the stories of the building. We explore the allocation mechanism and derive several closed-form properties by which the value pattern of stories in a building is rationalized. The proposed cost allocation may, among other things, generate values when comparable market prices are unobservable (consistent with the cost approach); may be used by courts in order to compute compensations in cases of disputes regarding expansions and redevelopments of existing structures among co-owners; and may determine the rent cost allocation in an organization with several profit centers located on different floors of a building. © 2009 Elsevier Inc. All rights reserved.
Source Title: Journal of Housing Economics
URI: http://scholarbank.nus.edu.sg/handle/10635/46216
ISSN: 10511377
DOI: 10.1016/j.jhe.2009.02.001
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