An equilibrium search model for buyers and sellers and an empirical application for the real estate market.

摘要

The amount of information available to web users is limited mostly by technological constraints which will be significantly less restrictive in the next decade. Improvements in information contained in online advertisements should have important effects on buyers' and sellers' search behavior and in equilibrium market outcomes. We evaluate such effects in the Real Estate market using a two-sided equilibrium search model.; We specify and estimate an equilibrium two-sided search model that depicts many of the Real Estate market's features. The theoretical model modifies the framework of existing equilibrium search models in the labor literature to capture, in an equilibrium context, five very important characteristics of the housing market: (a) buyers' and sellers' search behavior, (b) heterogeneity in agents' motivation to trade, (c) transaction costs, (d) a trading mechanism with posting prices and bargaining, and (e) the availability of an online advertising technology. To estimate our theoretical model, we use maximum likelihood methods and Multiple Listing Services data.; Our estimates suggest that, on average, only 3% of the relevant information that home-buyers collect before making a purchase decision is obtained through online ads. Furthermore, we use the estimated model to conduct counterfactual experiments and find that, improvements in online information displayed by Real Estate ads decrease equilibrium prices but increase the time that a property stays on the market.