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Paper eres2010_199:
MULTIPLE EQUILIBRIA IN GAME THEORY: SHARING PROFITS VS. MARKET PRICE

id eres2010_199
authors Marcato, Gianluca; Limentani, Giovanni
year 2010
title MULTIPLE EQUILIBRIA IN GAME THEORY: SHARING PROFITS VS. MARKET PRICE
source 17th Annual European Real Estate Society Conference in Milan, Italy
summary The application of game theory to real option analysis is useful to understand the interaction between agents and the reason why developers tend to develop earlier than expected. Using a discrete time model, we critically present the limits of the Smit and Ankum (1993) model and propose a modified version of the same by assuming a profit sharing market environment to overcome multiple equilibria (i.e. situations where rules of thumb are used to determine the agents' profit). Finally, we introduce a speed of reaction to test different competition levels and we numerically show that the aggressiveness of developers reduces option values.
keywords Game Theory, Real Options, Real Estate Development
series ERES:conference
email g.marcato@henley.reading.ac.uk
more http://www.eres2010.org/index.asp?page=papers_download
discussion No discussions. Post discussion ...
ratings Ratings: 5
session Real Estate Finance & Investment
last changed 2010/08/04 20:47
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