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Title: Optimal Pricing Strategy in the Case of Price Dispersion: New Evidence from the Tokyo Housing Market
Authors: Deng, Y. 
Gabriel, S.A.
Nishimura, K.G.
Zheng, D.
Issue Date: 2012
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.
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
ISSN: 10808620
DOI: 10.1111/j.1540-6229.2012.00347.x
Appears in Collections:Staff Publications

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