Real estate leasing: Search and optimal contract design.

摘要

This dissertation focuses on specific formulations and characteristics of contract bargaining processes in real estate leasing markets. It is an attempt to apply the contract bargaining approach, the search approach and the contract mechanism design approach in microeconomics and game theory to the complex real estate lease contracting.; This dissertation examines three interrelated and yet relatively independent contractual problems in real estate leasing. First, the optimal price and contract length under the influence of bargaining power of the parties are investigated. Two theoretical models are developed and empirically verified using commercial real estate data. Second, the characteristics of the search behavior of agents in both leasing and purchasing markets are modeled, with no recall and with recall. The optimal search decisions are derived for either type of the agent. Numerical simulations demonstrate the significance of the proposition. Lastly, the mechanism design of the contract with a downsizing option is formulated; it demonstrates the adverse selection and optimal use of the leasing provision. The optimal contract rent is simulated with numerical assumptions, which is largely supported by empirical evidence from an endogenous switching regression model using commercial real estate data.