Influence of Transaction Cost on Developer’s Decision of Developing Green Building

Abstract:

This paper analyzes why real estate developer is skeptical of developing green building that is with great investment potential in point of transaction cost economics and game theory. And establishes two kinds of developers’ game models under three type market environment, analyzes their decisions’ equilibrium income, research result finds that market transaction cost, such as opportunity cost, market information asymmetry, bounded rationality, contractual risk and et al., have great influence on developers’ decisions. This paper concludes three models’ value and their policy significance, and gives suggestions on reducing transaction costs, optimizes green building market for reference.

Key words:green building; transaction cost; game theory;information asymmetry