Focal points and bargaining in housing markets

• 成果类型: Article
• 署名作者: Pope, Devin G.; Pope, Jaren C.; Sydnor, Justin R.
• 署名单位: University of Chicago; Brigham Young University; University of Wisconsin System; University of Wisconsin Madison; National Bureau of Economic Research
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2015.07.002
• 发表日期: 2015
• 页码: 89-107
• 关键词: Focal points; bargaining; housing prices

摘要

Are focal points important for determining the outcome of high-stakes negotiations? We investigate this question by examining the role that round numbers play as focal points in negotiations in the housing market. Using a large dataset on home transactions in the U.S., we document sharp spikes in the distribution of final negotiated house pikes at round numbers, especially those divisible by $50,000. The patterns cannot be easily explained by simple stories of convenience rounding or by list prices. We conclude that round numbers can serve as focal points, even in settings with very high stakes. (C) 2015 Elsevier Inc. All rights reserved.