STRATEGIC INTERACTIONS OF URBAN LAND DEVELOPERS IN THE HOUSING MARKET

Back to Page Authors: Cesaltina Pacheco Pires, Sílvia Ferreira Jorge, Margarida Catalão-Lopes, Pedro Miguel Moreira Lopes Garcês, Joana Pinho

---

Keywords: vertical differentiation, urban land developers, strategic interaction, price/quality competition

---

Abstract: We discuss a model where there are two urban land developers (ULD), one located at the central business district (CBD) while the other has a more decentralized location. The producers first simultaneously decide their housing quality and then compete in prices. We assume that, for the same price, all consumers prefer more quality and a house located in the CBD. This article provides a full characterization of the Nash equilibrium of the second stage price competition game, considering all possible market coverage configurations.

---