Heterogeneous Noise and Stable Miscoordination

Housing Market Discount Rates: Evidence From Bargaining and Bidding Wars

“…We exclude transactions that were likely concluded 24 An alternative interpretation not yet considered is that some sellers suffer from miscoordination and therefore have high discount rates. Specifically, Arigapudi et al (2023) show that some sellers rely on small, noisy samples to choose non-payoff-maximizing low markups, implying high discount rates. However, in contrast to their suggestion that only a few sellers have high discount rates, we find that the discount rate is high for essentially all sellers; see Figure 3.…”