Throughout the economies of the world, construction industry plays an important role. A major share of the activities within the industry takes place in the housing market. Since the mid-1990s, increases in housing prices have been frequently observed in a variety of countries. In order to explain the price increases, researchers from a multitude of disciplines have studied the housing markets. However, research output from construction management domain is scarce. This research study presents an agent-based model (ABM) named Housing Market Laboratory (HoML) for the purpose of testing hypotheses related to housing price formations. The model comprises three types of agents representing developers, households, and land owners who trade two commodities simultaneously: land and housing units. Combining rules adapted from standard urban economics with a cellular spatial model, HoML allows agents to interact using bilateral bid and ask prices. While the focus of this research paper is the theoretical underpinnings of the land use and housing models, several experiments are presented in order to demonstrate the use of the model. The results of these experiments suggest that HoML conforms to the behaviors of earlier models. Furthermore, an experiment focusing on developer behavior demonstrate the potential of HoML in exploring differing objectives of agents which trade in housing markets.
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