A HOUSING MARKET WITH COURNOT COMPETITION AND A THIRD HOUSING SECTOR

TROND-ARNE BORGERSEN

Abstract:

This paper integrates a non-profit third-housing sector (THS) into a housing market with Cournot competition. The paper analyses the indirect effects of a THS on the aggregate housing market, on a commercial housing supplier and on the market adaption of households not embraced by the THS. While beneficial for households included in the THS, a question arises related to the indirect effects of a THS. The paper argues for crowding-out and higher house prices in the commercial housing market in response to a THS expansion. In addition, a THS also affects the strategic behaviour of the commercial housing supplier. Compared to a conventional Cournot housing market, a fixed THS housing supply changes the market structure from one where the housing supply of different housing providers are alternative to one-another, to a market structure where housing supply is complementary.

Keywords:
Housing market, Cournot competition, Third Housing Sector, Indirect effects.

DOI: 10.52950/ES.2022.11.2.002

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APA citation:
TROND-ARNE BORGERSEN (2022). A Housing Market with Cournot Competition and a Third Housing Sector. International Journal of Economic Sciences, Vol. XI(2), pp. 13-27. , DOI: 10.52950/ES.2022.11.2.002


Copyright © 2022, Trond-Arne Borgersen et al, trond.a.borgersen@hiof.no