Showing papers by "Harvey Molotch published in 1968"

The Prisoner's Dilemma and Ghetto Expansion

Abstract: IF NEGROES ARE BARRED from acquiring housing in particular neighborhoods even when they are willing and able to pay the prevailing price, then this fact poses a serious challenge to the economic theory of markets. Since the real estate market is characterized by a large number of potential buyers and sellers coming together amongst abundant relevant information, cartels are being formed in circumstances usually thought by economists to have all the necessary and sufficient conditions for pure and perfect competition. If cartels are being formed where competition is expected, how is it done? Perhaps even more vexingly, if such cartels persist, why is that persistence consistent with profit maximization by each participant? At this point in time there are many obstacles to researching these questions, but they fall into two general categories. First, data on race and profits in housing do not come to the economist in the way he needs them. Although governments regulate and tax many aspects of the housing market, thereby generating the data at least for useable proxy variables, they do so at the local level. The compilation of data in the depth and breadth to which economists have become accus-