Agent based Models

Mortgages The model aims to describe ahouse price bubble in the housing market by means of heterogeneous agent. There are 4 agent types that represent significant roles in describing the entire housing market model: a real-estate agent, households, banks, and a central bank. An interaction between those agents in the housing market has been built in accordance with the following pattern. Households decide to buy a house according to predetermined probabilities and look for their cash adequacy to purchase the house. If their cash is not sufficient to purchase the house, households request for a mortgage loan from the bank. Households sell their houses according to predetermined probabilities or due to their incapability to finance their mortgages (re sale). The real-estate agent accommodates households as an intermediary between sellers and buyers. Banks offer mortgage loans to households and get the cash flows from outstanding mortgages. Central Bank agent assists banks in terms of supplying liquidity in case of insufficient bank liquidity against mortgage loan requests.