Heterogeneity and Isomerism based Improved Sugarscape Modeling for Real Estate Market Cycles

For a long time, housing price dynamics have been a significant area of economic research, with various models and theories attempting to explain its complexity. However, the impact of market participants’ heterogeneity and isomerism on housing price fluctuations has not been thoroughly explored in these models. In this work, an improved Sugarscape model is used to construct an agent-based model to investigate the dynamics of the real estate market and the mechanisms behind its cyclical fluctuations. The model considers the range of agents’ vision, heterogeneity of expectations, and isomerism of roles to analyze how these factors contribute to the formation of housing price cycles. Simulation results show that expanding agents’ vision within a certain range increases market stability; however, beyond a specific value, it may lead to information overload, increasing market complexity and uncertainty. Furthermore, market volatility significantly increases when agents’ expectations converge. Analysis of isomerism indicates that agents with different roles have distinctly different impacts on housing prices, with varying behaviors and decision-making logics among market participants playing a crucial role in price fluctuations.