Regulation Of Real Estate Industry Based On Information Asymmetry

The real estate market in China is gradually developing with the reform of urban housing system. For a variety of reasons, the development of real estate market is extremely not mature, and the information asymmetry is serious. The specific effect can be discussed from three aspects. As for consumers, it is difficult for them to make correct choice to maximize utility in diversified products and prices. As for developers, it is not easy for them to supply commercial building, which aggravates the waste of resources. As for government, they should rationally regulate the market to reduce information asymmetry. Meanwhile, because of information asymmetry, the governmental regulation cannot achieve perfect effect.From the view of information economics, this paper analyzes the manifestation and formation reasons of information asymmetry, and the distortion to real estate market. Taking use of econometrics model, this paper proves that the real estate industry is not priced by the cost, but priced by monopolized developers. Through a game model and case analysis, it verifies that the regulation on real estate contributes to the improvement of consumer welfare, and puts forward some suggestions to reform the regulation in real estate market.Except the introduction, this paper can be divided into three parts. Chapter Two sets forth the essential features of real estate market, and summarizes the types of the information asymmetry, formation reasons and distortion in real estate market, then sets up a simple model to testify the correlativity between amount of information and consumer utility, and expounds the necessity of the government regulation. Chapter Three starts from concrete data, econometrics model and cases to analyze the behaviors of real estate developers, and corroborates the significance of the regulation from another aspect. On the basis of analyzing the present situation of regulation on real estate market, Chapter Four discusses the target and principle of regulation on real estate market, and from aspects of reducing information asymmetry and reinforcing the self-regulation, it puts forward some policy suggestions to reduce the information symmetry and promote health development of our real estate market.