The Game Analysis Between Developers And Consumers In The Pre-selling System Of The Real Estate

In the process of pre-selling the pre-completion projects, there is asymmetric information because developers have more information about the pre–completion buildings than consumers. Only when the projects are completed, consumers come to know the real information about the buildings. Two models will be built to describe the actions of the developers and consumers in the process of pre-selling and after pre-selling in this article. The first one is the signaling game model between developers and consumers. When pre-selling system is allowed, the buyers haven't complete information about the pre-completion buildings. Furthermore, the market is insufficiently mature for developers to acquire a reputation or for developers who are new entrants, so buyers do not know whether the developer is reliable. To avoid the adverse effect of asymmetric information, developers always resort to advertisement. After receiving the advertisement, consumers may judge the reliability by experience and then decide buy or not. Then the first model analyses the equilibrium outcome in complete and incomplete information. After the projects are completed, the buyers may have the real information of their house. If buyers find the real information different from their expectation while signed the contracts, they may negotiate with developers. The second model describes the actions strategy of developers and buyers in the situation. Through the backwards-induction this article compares the results of three models of a single consumer, a single developer with the one of multi-consumers, a developer, and with the third one considering the government's intervention, then states the effect of governments and aggregate vindication on the outcomes.