Strategic Interactions of Urban Land Developers in the Housing Market
Garcês, P., Pires, C., Pinho, J., Jorge, S., Catalão-Lopes, M., Alventosa, A.
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(2020)
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"Strategic Interactions of Urban Land Developers in the Housing Market"
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2020/01
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CEFAGE Author(s)
Pedro Miguel Moreira Lopes Garcês
Cesaltina Maria Pacheco Pires
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.