An agent-based modeling for housing prices with bounded rationality

Abstract

This study proposes an agent-based model to investigate major stakeholders' behaviors in the housing market. The proposed model mimics the heterogeneous behaviors of individual buyers and sellers in a housing market considering bounded rationality. The simulation results of case study in Shanghai are robust and reproduce stylized facts including as volatility clustering, absence of autocorrelations, heavy tail, loss asymmetry, and aggregational gaussianity on the absolute return.