A Hedonic Model with Rationing by Waiting
Abstract
We propose a new class of hedonic models with sticky prices and queues. Time replaces money as the invisible hand in the market. Unlike money, time is non-transferable to the trading partner. We prove the existence and uniqueness of the equilibrium, and we compare our model with the standard hedonic model with free-market prices. Our model can be used to study the market equilibrium and welfare implications when the prices are regulated, which is beyond the scope of the classical hedonic analysis.
