Multiplayer Speculation, Interest Coalition, and Housing Prices Fluctuations

Abstract

Real estate gives a huge impetus to the development of the national economy and surging housing prices can easily trigger social problems and financial risks. Considering housing price fluctuations, this study constructs a stochastic evolutionary game model from the perspective of the implicit interest coalitions among local governments, real estate enterprises, and speculators. The stable condition of the model is that local government, local governments decide to regulate, real estate enterprises select not to hype housing prices, and speculators choose not to buy houses. Through numerical simulation, this study finds that the supervision of central government and the regulatory strength of local governments can affect the choices of players differently, which gives a new explanation for the retaliatory rise of housing prices when local governments conduct regulation measures frequently. In addition, gray income, the punishment of hype, and the cost of speculation can make the strategic moves of players different in severity and direction under a stochastic environment. Based on these findings, countermeasures and suggestions are proposed in this study.