Consider a setting in which buyers and sellers match bi-laterally in housing market. Let B denote...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider a setting in which buyers and sellers match bi-laterally in housing market. Let B denote the number of potential buyers searching and S then number of sellers each which a single vacant house for sale. Let the number of matches each period between buyers and sellers be given by: M(B, S) = ABS-a 0 < a < 1. (1) a. Let 0 denote market tightness and find the probabilities of matching for both buyers and sellers. b. What happens to the number of matches as market tightness tends to infinity? c. Derive n(0), the elasticity of the number of matches, M(B, S), with respect to the number of sellers/vacancies, S. d. If matches are formed according to (1) and sellers post prices according to the process of directed search, how does the sellers' share of the surplus in housing transactions vary with market tightness, 0? Consider a setting in which buyers and sellers match bi-laterally in housing market. Let B denote the number of potential buyers searching and S then number of sellers each which a single vacant house for sale. Let the number of matches each period between buyers and sellers be given by: M(B, S) = ABS-a 0 < a < 1. (1) a. Let 0 denote market tightness and find the probabilities of matching for both buyers and sellers. b. What happens to the number of matches as market tightness tends to infinity? c. Derive n(0), the elasticity of the number of matches, M(B, S), with respect to the number of sellers/vacancies, S. d. If matches are formed according to (1) and sellers post prices according to the process of directed search, how does the sellers' share of the surplus in housing transactions vary with market tightness, 0?
Expert Answer:
Answer rating: 100% (QA)
Step 12 a The probabilities of matching for buyers and sellers are given by Pmatch for buyers ABSa A... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
In Exercise 5, let X3 denote the number of juniors in the random sample of 15 students, and let X4 denote the number of seniors in the sample. Find the value of E(X3 X4) and the value of Var(X3 X4).
-
Let X denote the number of Canon SLR cameras sold during a particular week by a certain store. The pmf of X is Sixty percent of all customers who purchase these cameras also buy an extended warranty....
-
Let X denote the number of bits received in error in a digital communication channel, and assume that X is a binomial random variable with p _ 0.001. If 1000 bits are transmitted, determine the...
-
In contrast to our analysis in Section 5.4.3, Carlton and Loury (1980) suggest that a Pigouvian tax alone will not lead to a long run social optimum for competitive polluting firms. Using their...
-
Draw an EVA Cost/Schedule Graph. For this example, assume that there are significant differences between the 3 constituent graphs.
-
Find the margin of error for the values of c, , and n. c = 0.975, = 4.6, n = 100
-
On November 15, 2010, Chandlers Department Store purchased $5,100 of inventory on account from one of its suppliers. The terms were 3/15, n/45, FOB shipping point. On November 18 Chandlers Department...
-
Multiple Choice Questions 1. Mittelstaedt Inc., buys 60 percent of the outstanding stock of Sherry, Inc. Sherry owns a piece of land that cost $212,000 but had a fair value of $549,000 at the...
-
What is the project need for THE RELATIONSHIP BETWEEN COMPETENCY IN FINANCIAL STEWARDSHIP AND THE RISING HEALTHCARE COSTS AMONG HEALTHCARE MANAGEMENT
-
Neighborhood Supermarkets is preparing to go public, and you are asked to assist the firm by preparing its statement of cash flows for 20X1. Neighborhoods balance sheets at December 31, 20X0, and...
-
Which of the three views of effectiveness covered in the lecture, discuss which specific measures are most useful to managers in evaluating the organizations effectiveness?
-
A carefully constructed series of tweets can serve as a summary of a blog post, video, or other message or document. Your task: Find any article, podcast, video, or webpage on a business topic that...
-
As a project manager at Expedia, one of the largest online travel services in the world, youve seen plenty of college interns in action. However, few have impressed you as much as Maxine Max...
-
Why is it essential to understand your readers likely motivations before writing a persuasive message?
-
Claris Inc. is an advertising agency that is pitching for a new account at the baby food company Baby Bright. The agency has never held any previous account in this business and has no idea what the...
-
Discuss the comparative advantages and disadvantages of using emotional appeal and logical appeal.
-
A company just paid a dividend to its common shareholders of $7.50 per share, so DIV 0 = $7.50. A newly introduced product line is expected to increase dividends by 75% for the next (or upcoming)...
-
What are three disadvantages of using the direct write-off method?
-
In Laplaces rule of succession (Example 5e), show that if the first n flips all result in heads, then the conditional probability that the next m flips also result in all heads is (n + 1)/(n + m + 1).
-
Suppose in Problem 72 that the two teams are evenly matched and each has probability 12 of winning each game. Find the expected number of games played. Problem 72 Two athletic teams play a series of...
-
An urn initially contains b black and w white balls. At each stage, we add r black balls and then withdraw, at random, r balls from the b + w + r balls in the urn. Show that E[number of white balls...
-
What is the relation between accounting and recordkeeping?
-
Who are the internal and external users of accounting information?
-
What are internal controls and why are they important?
Study smarter with the SolutionInn App