Wisconsin School of Business

Abdullah Yavas

Department Chair of Real Estate

Professor - Real Estate & Urban Land Economics
Robert E. Wangard Real Estate Chair

Abdullah Yavas holds the Robert E. Wangard Real Estate Chair and is the department chair of Real Estate and Urban Land Economics at the University of Wisconsin-Madison’s Wisconsin School of Business.

Previously, he was the Elliott Professor of Business Administration and the research director of the Institute for Real Estate Studies in the Smeal College of Business at Pennsylvania State University, where he received the Fred Brand Award for Outstanding Teaching, Smeal College's highest undergraduate teaching award.

His research focuses on the economics of intermediation broadly defined with a special focus on real estate brokerage. His research interests include real estate brokerage, mortgage contracts, economics of information, and experimental economics. He also uses laboratory experiments to advance understanding of market players’ deviations from the predictions generated by rational models.

Yavas has authored or co-authored more than 50 articles in peer-reviewed journals on real estate, finance, and economics.

The results of his research have been cited in some of the nationally known publications, including The Wall Street Journal, Time, Money, BusinessWeek, The Philadelphia Inquirer, and Boston Sunday Globe.
He has consulted for mortgage companies and real estate investment trusts.

Yavas is a world-renowned economist. In 2001, he made the World's Top 500 Economists list, according to the number of articles published, prepared by Tom Coupé and sponsored by the European Economic Association.

He was ranked 6th on the list of Top 50 Authors for publications in Base Real Estate Journals between 1994-1998 by the Journal of Real Estate Literature. Yavas serves on the Monetary Policy Committee of the Central Bank of the Republic of Turkey.

He earned his Ph.D. in economics from the University of Iowa.

Selected Accepted Journal Articles

Li, L., & Yavas, A. (2013). The Impact of a Multiple Listing Service. Real Estate Economics (forthcoming)
Chow , Y., Hafalir, I., & Yavas, A. (2013). Auction versus Negotiated Sale: Evidence from Real Estate Sales. Real Estate Economics (forthcoming)

Selected Published Journal Articles

Sahin, M., Sirmans, C., & Yavas, A. (2013). Buyer Brokerage: Experimental Evidence. Journal of Housing Economics (22), 265-277.
Ikramov , N., & Yavas, A. (2012). Asset Characteristics and Boom and Bust Periods: An Experimental Study.
Article AbstractWe examine the impact of transaction costs, short selling restrictions and divisibility of assets on market efficiency in experimental asset markets. We find that transaction costs do not exacerbate the inefficiency of the market. They reduce the magnitude of bubbles and push prices closer to fundamentals. More divisible assets exhibit smaller deviations of prices from fundamentals. Short selling restrictions contribute to prolonged bubbles, while relaxing them increases the occurrence of "bust cycles." We also find that experimental real estate markets display larger deviations of prices from fundamental values, longer boom and bust cycles and smaller turnover than experimental financial markets.
Real Estate Economics (40), 508-535.
Bian, X., & Yavas, A. (2012). Prepayment Penalty as a Screening Mechanism for Default and Prepayment Risks. Real Estate Economics
Agarwal, S., Chang, Y., & Yavas, A. (2012). Adverse Selection in Mortgage Securization.
Article AbstractWe investigate lenders’ choice of loans to securitize and whether the loans they sell into the secondary mortgage market are riskier than the loans they retain in their portfolios. Using a large dataset of mortgage loans originated between 2004 and 2008, we find that banks sold low-default risk loans into the secondary market while keeping higher-default risk loans in their portfolios. This result holds for both subprime and prime loans. We do find strong support for adverse selection with respect to prepayment risk; securitized loans had higher prepayment risk than portfolio loans. It appears that in return for selling loans with lower default risk, lenders retain loans with lower prepayment risk. Small lenders place more emphasis than large lenders on default risk versus prepayment risk of the loans they retain. Securitization strategies of lenders changed during the sample period as they became less willing to retain higher-default loans after the housing market reached its peak. There are also differences in the performance of loans sold to GSEs and loans sold to private issuers. Loans sold to private issuers have lower prepayment rates in each year while relative default rates vary across the years.
Journal of Financial Economics (105), 640-660.
Rutherford, R., & Yavas, A. (2012). Discount Brokerage in Residential Real Estate Markets.
Article AbstractTransaction costs are thought to affect asset prices and market liquidity, but the direction and magnitude of these effects continues to be the subject of debate. In the single family residential market discount brokers offer to list a house for a lower price and thus reduce the transaction costs associated with obtaining a match. In this paper we obtain empirical estimates of the price and liquidity impact of a seller selecting a discount broker to market a single family residential property. The unique data set allows for the identification of residential properties that were listed by a discount brokerage firm. The empirical results confirm the predictions of our theoretical model. Using a sample of 318,211 listings and 243,625 sales, we find that houses listed by discount brokers sell at prices similar to non-discount brokerage listings, but are less likely to sell and when they do sell, take approximately 3 days longer to sell. The results indicate that lower transaction costs do not impact housing prices in this market, but are related to asset liquidity.
Real Estate Economics (40), 508-535.
Ikromov, N., & Yavas, A. (2012). Cash Flow Volatility, Prices and Price Volatility: An Experimental Study. Journal of Real Estate Finance and Economics (44), 203-229.
Yildirim, Y., & Yavas, A. (2011). Price Discovery in Real Estate Markets: A dynamic Analysis.
Article AbstractAlthough the correlation between the public and private market pricing of real estate has generated considerable research effort, the methods utilized in previous studies have failed to capture the dynamic nature of this correlation. This paper proposes a new statistical method to address this issue. This method, known as the dynamic conditional correlation GARCH model, enables us to study the dynamics of the correlation between the two markets over time and enrich our understanding of the public and private market pricing of real assets. We find that the correlation between NAV returns and REIT returns is dynamic for all REIT types and there is a strong degree of persistence in the series of correlation. Our Granger-causality tests show that price discovery generally takes place in the securitized public market. However, we also find significant variations across property types and individual firms within each type. Our results indicate that constructing an optimal portfolio requires firm level analysis of causality and correlation between REIT returns and NAV returns.
Journal of Real Estate Finance and Economics (42), 1-29.
Vandegrift, D., & Yavas, A. (2011). An Experimental Test of Behavior under Team Production. Managerial and Decision Economics (32), 35-51.
Vandegrift, D., & Yavas, A. (2010). An Experimental Test of Sabotage in Tournaments. Journal of Institutional and Theoretical Economics (166), 259-285.
Fisher, L., & Yavas, A. (2010). Case for Percentage Commission Contracts: The Impact of a "Race" Among Agents.
Article AbstractIn standard principal-agent problems, the issue at hand is how to align the interests of the agent with those of her principal. A commonly used contract involves the principal paying the agent a percentage of the sale price as commission. With respect to real estate brokerage conracts, it has been argued that percentage commission contracts fail to provide sufficient incentives to the agent. This paper re-evaluates the standard solution to a one seller, one agent agency problem by introducing more than one agent. It is shown that percentage commission contracts can induce first-best effort levels from agents. The result is due to the negative externalities created by the winner-takes-all race among agents. The optimal commission rates in this model are inconsistent, however, with the observed uniformity in commission rates across markets in the U.S.
Journal of Real Estate Finance and Economics (40), 1-13.
Chang, Y., & Yavas, A. (2009). Do Borrowers Make Rational Choices on Points and Refinancing?.
Article AbstractUtilizing individual mortgage data, we find that borrowers with points are less likely to refinance, and when they do, they take longer to refinance. This finding supports the separating equilibrium prediction of earlier studies that borrowers with higher (lower) refinancing costs self-select into mortgages with higher-point/lower-rate (lower-point/higher-rate) loans.
Real Estate Economics (37), 635-658.
Vandegrift, D., & Yavas, A. (2009). Men, Women and Competition: an Experimental Test of Behavior. Journal of Economic Behavior and Organization (72), 554-570.
Vandergrift, D., Yavas, A., & Brown, P. (2007). Incentive Effects and Overcrowding in Tournaments: An Experimental Analysis. Experimental Economics (10), 345-368.
Posey, L., & Yavas, A. (2007). Screening Equilibria in Experimental Markets.
Article AbstractWe conduct an experimental test of a screening model of an insurance market with asymmetric information. We first conduct three sessions in which the proportion of high risk buyers is such that a separating equilibrium should exist. We then conduct three more sessions in which the only change we make is decreasing the proportion of high risks such that the equilibrium is now a pooling equilibrium. In both treatments, the observed behavior converges to the equilibrium prediction.
Geneva Risk and Insurance Review (32), 147-167.
Rutherford, R., Springer, T., & Yavas, A. (2007). Evidence of Information Asymmetries in the Market for Residential Condominiums. Journal of Real Estate Finance and Economics (35), 23-38.
Fisher, L., & Yavas, A. (2007). The Value of Equitable Redemption in Commercial Mortgage Contracting. Journal of Real Estate Finance and Economics (35), 411-426.
Yavas, A., Rutherford, R., & Ford, J. (2005). The Effects of the Internet on Marketing Residential Real Estate. Journal of Housing Economics (14), 92-108.
Dokmeci, V., Onder, Z., & Yavas, A. (2003). External Factors, Housing Values and Rents: Evidence from Survey Data. Journal of Housing Research (14), 83-99.
Yavas, A. (2002). Endogenous Outside Options in Coordination Games: Experimental Evidence. Journal of Economic Behavior and Organization (47), 221-236.
Katok, E., Sefton, M., & Yavas, A. (2002). Implementation by Iterative Dominance and Backward Induction: an Experimental Comparison. Journal of Economic Theory (104), 89-103.
Posey, L., & Yavas, A. (2001). Adjustable and Fixed Rate Mortgages as a Screening Mechanism for Default Risk. Journal of Urban Economics (49), 54-79.
Munneke, H., & Yavas, A. (2001). Incentives and Performance in Real Estate Brokerage: Theory and Evidence. Journal of Real Estate Finance and Economics (22), 5-21.
Yavas, A. (2001). Resolution of Demand Uncertainty and Competitive Rent Adjustment. Journal of Housing Economics (10), 472-481.
Yavas, A., Miceli, T., & Sirmans, C. (2001). An Experimental Analysis of the Impact of Intermediaries on the Outcome of Bargaining Games. Real Estate Economics (29), 61-86.
Abrahms, E., Sefton, M., & Yavas, A. (2001). An Experimental Comparison of Two Search Models. Advances in Experimental Markets
Yavas, A. (2001). Impossibility of a Competitive Equilibrium in Brokerage Industry. Journal of Real Estate Research (21), 187-200.
Yavas, A. (2001). The Immediacy Service of the Specialist as a Coordination Mechanism. International Review of Economics and Finance (10), 205-221.
Rutherford, R., Springer, T., & Yavas, A. (2001). The Impacts of Contract Type on Broker Performance. Real Estate Economics (29), 389-409.
Abrahms, E., Sefton, M., & Yavas, A. (2000). An Experimental Comparison of Two Search Models. Economic Theory (16), 735-749.
Yavas, A., & Colwell, P. (1999). Buyer Brokerage: Incentive and Efficiency Implications. Journal of Real Estate Finance and Economics (18), 259-277.
Yavas, A. (1998). The Effect of Government Size on Economic Development: Does Too Much Government Investment Retard Economic Development of a Country?. Journal of Economic Studies (25), 296-308.
Yavas, A. (1996). Matching of Buyers and Sellers by Brokers: A Comparison of Alternative Commission Structures. Real Estate Economics (24), 87-112.
Sefton, M., & Yavas, A. (1996). Abreu-Matsushima Mechanisms: Experimental Evidence. Games and Economic Behavior (16), 280-302.
Yavas, A. (1996). Search and Trading in Intermediated Markets. Journal of Economics and Management Strategy (5), 195-216.
Sefton, M., & Yavas, A. (1996). Threat to Regulate and Coordination Failures: Expiermental Evidence. Journal of Real Estate Finance and Economics (12), 97-115.
Yavas, A., & Yang, S. (1995). The Strategic Role of Listing Price in Marketing Real Estate: Theory and Evidence. Real Estate Economics (23), 347-368.
Sefton, M., & Yavas, A. (1995). The Welfare Effects of a subsidy to Multiple Listing Services. Journal of Real Estate Finance and Economics (11), 85-90.
Yang, S., & Yavas, A. (1995). Bigger is Not Better: Brokerage and Time on the Market. Journal of Real Estate Research (10), 23-33.
Yavas, A. (1995). Seller - Broker Relationship as a Double Moral Hazard Problem. Journal of Housing Economics (4), 244-263.
Yavas, A. (1995). Can Brokerage Have an Equilibrium Selection Role. Journal of Urban Economics (37), 17-37.
Colwell, P., & Yavas, A. (1995). A Comparison of Real Estate Marketing Systems: Theory and Evidence. Journal of Real Estate Research (10), 583-599.
Posey, L., & Yavas, A. (1995). A Search Model of Marketing Systems in Property-Liability Insurance. Journal of Risk and Insurance (62), 666-689.
Kahn, C., & Yavas, A. (1994). The Economic Role of Foreclosures. Journal of Real Estate Finance and Economics (8), 35-51.
Yavas, A. (1994). Middlemen in Bilateral Search Markets. Journal of Labor Economics (12), 406-429.
Yavas, A. (1994). Economics of Brokerage: An Overview. Journal of Real Estate Literature (2), 169-195.
Colwell, P., & Yavas, A. (1994). Demand for Agricultural Land and Strategic Bidding in Auctions. Journal of Real Estate Finance and Economics (8), 137-149.
Colwell, P., & Yavas, A. (1993). The Value of Deed Quality. Journal of Real Estate Finance and Economics (7), 143-150.
Bhattacharya, U., & Yavas, A. (1993). In Search of the Right Middleman. Economic Letters (42), 341-348.
Yavas, A. (1992). Marketmakers versus Matchmakers. Journal of Financial Intermediation (2), 33-58.
Yavas, A. (1992). A Simple Search and Bargaining Model of Real Estate Markets. Real Estate Economics (20), 533-548.
Colwell, P., & Yavas, A. (1992). The Value of Building Codes. Real Estate Economics (20), 501-517.

Submitted Working Papers

Yavas, A., Anbrose, B., & Sanders, A. Servicers and Mortgage-Backed Securities Default: Theory and Evidence.
Article AbstractWe study conflicting incentives of the master and special servicers in handling troubled loans in a CMBS deal and how the frictions between the interests of the two servicers might be diminished if the master and special servicing rights are held by the same firm. We show that concentrating both servicing rights in one firm reduces the likelihood that a defaulted loan terminates in foreclosure.


Hong Kong Monetary Authority ( 2013 ) Asset Price Bubbles and Monetary Policy

Keynote Speaker, 2nd International Conference of Young Scientists; Keynote Speaker ( 2011 ) Bubbles and Monetary Policy

26th Meeting of Central Bank Governors' Club ( 2011 ) Bubbles and Monetary Policy

University of Toronto ( 2010 ) Adverse Selection in Mortgage Securitization

African Econometric Society Meeting ( 2010 ) Adverse Selection in Mortgage Securitization

Florida State University Research Symposium: The Economics of Information in Real Estate Markets ( 2010 ) Cash Flow Volatility, Prices and Price Volatility: An Experimental Study

University of South Carolina ( 2010 ) Adverse Selection in Mortgage Securitization

Rays of Research ( 1 ) Asset Characteristics and Boom and Bust Periods

Turkish American Cultural Association of Madison ( 1 ) Monetary Policy and Financial Crisis

Turkish Capital Markets Board ( 1 ) Role of Housing in Current Financial Crisis

Undergraduate Courses

Urban & Regional Economics
Course DescriptionNature and structure of urban economies; location of economic activity; economic analysis in an urban framework; principles of urban economic development, housing, transportation, poverty and unemployment and municipal finance. Forecasting of economic activity using census and socioeconomic data.
(RES 420 Section 1), Fall 2009.

Real Estate Finance
Course DescriptionFundamentals of real estate finance; sources of funds, alternative financing instruments, and mortgage securitization; analysis emphasizing cash flow projections, yield and risk for residential and commercial real estate; pricing of mortgage securities.
(RES 410 Section 1), Fall 2009.

Graduate Courses

Smr-Urban Land Econ PhD
Course DescriptionContinuation of Urb R Pl/Real Est 977.
(RES 978 Section 1), Fall 2009.

Smr-Urban Land Econ PhD
Course DescriptionContinuation of Urb R Pl/Real Est 977.
(RES 978 Section 1), Fall 2010.

Real Estate Finance
Course DescriptionEvaluating the role of financing and leverage in real estate investment analysis; identifying alternative types of financing; valuation of financial structure; sources of equity financing for real estate; mortgage securitization and the operaion of secondary mortgage markets.
(RES 710 Section 1), Fall 2010.

Learning/Teaching Oriented Publications

Rutherford, R., Springer, T., & Yavas, A. (2005). Conflicts between Principals and Agents: Evidence from Residential Brokerage. Journal of Financial Economics (76), 627-665.
Ross, S., Yinger, J., & Yavas, A. (2004). The Color of Credit. Journal of Economic Literature
Yavas, A. (2001). How Real Estate Brokers Affect the Outcome of Negotiations Between Buyers and Sellers. Illinois Real Estate Letter, 1-4.

Professional Organizations

RERI Advisory Board

Member of Board of Directors, American Real Estate and Urban Economics Association

Editorial and Reviewing Activities

Real Estate Economics - January 2014 - January 2018

Borsa Istanbul Review - Since November 2012
Editorial Board Member

Real Estate Finance - Since August 2012
Editorial Board Member

Central Bank Review - Since January 2010
Associate Editor

Special issue of The Journal of Real Estate Finance and Economics on Brokerage - January 2006 - December 2006
Special Issue Editor

Journal of Housing Economics - Since January 2002
Editorial Board Member

Mathematical and Computational Applications - Since January 2001
Editorial Board Member

Real Estate Economics - Since January 2000
Editorial Board Member

Journal of Real Estate Research - Since January 1999
Editorial Board Member

The Journal of Real Estate Finance and Economics - Since January 1996
Editorial Board Member

Photograph of Abdullah Yavas

Abdullah Yavas

Department Chair of Real Estate
Professor | Real Estate & Urban Land Economics
Robert E. Wangard Real Estate Chair
(608) 263-7651
5251 Grainger Hall