Exploring House Price Dynamics: An Agent-Based Simulation with Behavioral Heterogeneity

Date

2019-08-01

Author

Ozbakan, Tolga A.
Kale, Serdar
Dikmen Toker, İrem

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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The objective of this study is to contribute to the understanding of price formations in housing markets through an agent-based simulation that conceptualizes insights from behavioral economics. For this purpose, the study uses a prominent real estate market model as a benchmark and extends it to account for (1) behavioral heterogeneity and (2) dynamic agent interaction. The validation of the model is carried out by using real data from the Turkish housing market. The results show that the introduction of a fitness-based behavior-switching regime with myopic agents improves the extent to which the observed market behavior can be replicated, in comparison to the benchmark model.

Subject Keywords

Economics, Econometrics and Finance (miscellaneous), Computer Science Applications

URI

https://hdl.handle.net/11511/49047

Journal

COMPUTATIONAL ECONOMICS

DOI

https://doi.org/10.1007/s10614-018-9850-5

Collections

Department of Civil Engineering, Article

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Citation Formats

T. A. Ozbakan, S. Kale, and İ. Dikmen Toker, “Exploring House Price Dynamics: An Agent-Based Simulation with Behavioral Heterogeneity,” COMPUTATIONAL ECONOMICS, pp. 783–807, 2019, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/49047.