Consistent with existing literature, we first show that when borrowers?default probability on the mortgage loan is unobservable to the lender, the latter can screen borrowers by their combined choice of loan-to-value (LTV) ratio and interest rate. We further demonstrate that when borrowers also...

This study developed a unified framework for theoretically analyzing a set of mortgage attributes that screens borrower types according to their unobservable default risk. In the presence of asymmetric information, a self-selection process is attained, where lower default risk type borrowers...

The signaling model of Spence (1973) and the screening model of Rothchild and Stiglitz (1976) have been separately used to explain economic phenomena when there is asymmetric information. In the real world, however, situations of asymmetric information often simultaneously involve signaling and...

In this paper, we combine direct arbitrage arguments and an option-pricing approach to develop a method of pricing the option for rent control. For a lump-sum payment of "key money," a tenant acquires the right to rent a real estate unit for an exogenously determined controlled rent, as opposed...

We analyze the brokerage service cost allocation in the rental housing market. We explain the alleged inconsistent phenomenon of landlords only occasionally requiring tenants to incur mediation cost. We show that when asymmetric information is introduced, under which tenants' tenure horizon is...

Does there exist a voting rule to be, for example, inserted into the constitution of a newly constructed apartment building, which is likely to attract the greatest number of consumers? We analyze this and other questions within a framework in which co-owners resolve future debates by voting. We...

We adopt the Shapley value approach to examine the fair allocation of the depreciation charges among the time periods of the asset's useful life. Essentially, the allocation under the Shapley value solution rewards each time period of the asset's useful life with a share of the earnings that...

When there is asymmetric information regarding the quality of a traded durable asset, the informed seller might signal asset quality to prospective uninformed buyers by investing in improvements and maintenance. In contrast to Spence (1973), however, this signal may be productive. We derive...