Assessing the Role of Reward and Punishment Mechanism in House Price Regulation in China: A Game-Theoretic Approach
Publication: Journal of Urban Planning and Development
Volume 146, Issue 3
Abstract
In recent years, the Chinese government has introduced relevant real estate policies to control the rapid rise of house prices, but with little effect. The success of regulation largely depends on the active participation of real estate developers. However, how to encourage developers to actively participate in regulation is under-explored. To fill this gap, we use the Nash game to explore the reasons for the failure of house price regulation, and then design a reward–punishment mechanism to urge real estate developers to actively implement regulatory policies. Our analysis shows that the passive participation of real estate developers leads to the failure of regulation. The established reward and punishment mechanism, if a considerable amount of reward and punishment is formulated, can effectively prompt developers to actively implement policies. These findings are of great value to promote the healthy development of the real estate market.
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Published In
Journal of Urban Planning and Development
Volume 146 • Issue 3 • September 2020
Copyright
© 2020 American Society of Civil Engineers.
History
Received: Dec 18, 2019
Accepted: Apr 15, 2020
Published online: Jun 30, 2020
Published in print: Sep 1, 2020
Discussion open until: Nov 30, 2020
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