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Strategic Interactions of Urban Land Developers in the Housing Market

GarcÍs, P., Pires, C., Pinho, J., Jorge, S., Catal„o-Lopes, M., Alventosa, A. (2020), Strategic Interactions of Urban Land Developers in the Housing Market, CEFAGE-UE Working Paper 2020/01.
Abstract:

We discuss a model where there are two urban land developers (ULD), one located at the central business district (CBD) while the other has a more decentralized location. The producers first simultaneously decide their housing quality and then compete in prices. We assume that, for the same price, all consumers prefer more quality and a house located in the CBD. This article provides a full characterization of the Nash equilibrium of the second stage price competition game, considering all possible market coverage configurations.

Download: WStrategic2020outfinal.pdf