סמינר באסטרטגיה

Speaker: Professor David Genesove, Department of Economics, Hebrew University​

Abstract:

This paper is about the transition from one economic norm to another.  The setting is the Israeli housing market, where the US dollar was used nearly exclusively as a measure of value until 2006, after which the market moved to using the local currency (the shekel).    We find that self-reported rents and home values begin the transition to the shekel first, then transactions or contract indexation and finally advertising, but thatthe speed of transition is ranked in the reverse order.  This suggests that co-existence of competing norms is more difficult the more individuals on the other side of the market to which one’s actions are directed.  Throughout the examined period the medium of exchange was the shekel, which explains differences in self-reported valuations between owner-occupants and renters, new and old tenants, and tenants near and far fromcontract renewal time.