Seminar Vol. 190

Title: Golfing for Information: Social Interactions and Economic Consequences

Speaker: Xiaoyu Zhang, National University of Singapore

Time: October 24th, 2019      13:30-15:00

Venue: Conference Room 406, Zengxianzi Science Hall

About the speaker:

Xiaoyu Zhang is a Ph.D. candidate at Department of Real Estate, National University of Singapore. Her research primarily focuses on urban economics, political economics and corporate investment. She has been invited to present on international conferences such as SFS Cavalcade, AREUEA-ASSA, AFA Doctoral Session and SMU Conference on Urban and Regional Economics.

Abstract:

This paper studies how company directors acquire information through social interactions at golf courses to subsequently acquire land parcels at lower prices. Developers play golf together more often after the government makes a land sale announcement. We find evidence rejecting the collusion hypothesis. The winning bids are 14% lower after interacting with other company directors, and the lower land prices allow the developers to sell new units 9% cheaper. However, the lower land prices by informed bidders generate negative spillovers on neighboring properties. Our results imply that social interactions enable developers to realize higher profits, while the government loses land sale revenues.