Matching models and housing markets: the role of the zero-profit condition

Gaetano Lisi

No 1301, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: The recent and growing literature which has extended the use of search and matching models even to the housing market does not use the free entry or zero-profit assumption as a key condition for solving the equilibrium of the model. This is because a straightforward adaptation of the basic matching model to the housing market seems impossible. However, this paper shows that the zero-profit condition can be easily reformulated to take the distinctive features of the housing market into account. Indeed, it helps to provide a theoretical explanation for well-known empirical regularities in the housing markets.

Pages: 10 pages
Date: 2013-01
New Economics Papers: this item is included in nep-dge and nep-ure
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http://repecsrv.uv.es/paper/RePEc/pdf/eec_1301.pdf First version, 2013 (application/pdf)

Related works:
Journal Article: Matching Models and Housing Markets: the Role of the Zero-Profit Condition (2013)
Working Paper: Matching models and housing markets: the role of the zero-profit condition (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:1301

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