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

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


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This article presents a quantitative analysis of optimal inflation volatility in a simple sticky-price general equilibrium model subject to both supply and cost-push shocks. It is found that optimal policy implies a relatively small degree of inflation volatility even when cost-push shocks are the dominant source of economic disturbance. In addition, it is found that optimal policy generates only a very small welfare gain when compared to strict inflation targeting.
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Ünal, Umut (Wroclaw University of Economics and Business, 2018-01-01)
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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.