Social and Behavioral Sciences Commons^™

Estimating Financial Information Asymmetry In Real Estate Transactions In China: An Application Of Two-Tier Frontier Model, Ganlin Pu, Ying Zhang, Li-Chen Chou

Research Collection School Of Computing and Information Systems

This study applies the two-tier stochastic frontier model to estimate the distribution of housing transaction information in Hangzhou, Wenzhou, Ningbo, and Jinhua (four cities in Zhejiang Province, China) during the year 2018, to analyze the difference in the price information acquired by the buyers and sellers in the transaction, and the effect of information asymmetry on the transaction price. The empirical results show that in each city, during the housing transaction process, the supplier has more complete information about house prices than consumers, and can therefore implement price discrimination strategies in setting service prices. Due to the disadvantage in acquired …