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Information Asymmetry, Regulations and Equilibrium Outcomes: Theory and Evidence from the Housing Rental Market
Author(s) -
Ambrose Brent W.,
Diop Moussa
Publication year - 2021
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12262
Subject(s) - information asymmetry , renting , rental housing , economics , asymmetry , microeconomics , public economics , law , physics , quantum mechanics , political science
We explore the role of information asymmetry and regulations on equilibrium outcomes in rental markets to show that while landlords price the cost of regulations into rent, they also invest in tenant screening to alleviate information asymmetry, thus restricting access to rental housing. We are the first to document this additional tenant screening in response to regulations.