Strategic behavior and policy interventions in real estate market: Policy choice and effectiveness analysis

The global financial crisis broken out in 2008, a variety of hidden economic problems were gradually exposed. As one of the national pillar industry in China, real estate industry had been over developed. And the related risk was accumulated to a critical level. At this international financial crisis and the continuing spread of the background, the Chinese government had to enact series of “restriction order” in 2009, which were known as the most severe macro-control policy for real estate market. This paper focuses on the optimal strategic pricing behavior of real estate developers in this specific economic context, and analyzes the effectiveness of “restriction order” on market price.