Abstract
An economic model of a rental housing market has to take account of several facts, which complicate an economic study. First, agents in the housing market are often incompletely informed about the actual demand and supply conditions with the immediate consequence that the market participants have to engage in a costly search process with crucial implications for the market behaviour. Furthermore, risk aversion on both sides of the market favours the formation of a contract market. Thus, trading takes place about contracts for the exchange of the services of a particular housing unit, rather than the services themselves (cp. WIESMETH (1983)). This shift means that the observable state in the housing market is largely determined by the situation in the contract market. Common observations like price rigidities, price dispersions, intended vacancies can be generated by certain contract equilibria, especially, when the contract market is restricted by a rental protection legislation.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
