Research on Optimal Model of Risk Sharing about Housing Pre-sale System in China

The housing pre-sale system is an important financing mode to the real estate industry which is connected with long project cycle and plenty of capitals. In this paper, the essential questions in the housing pre-sale system in China is analysed, that is, it is only a unilateral risk sharing system. The institutional arrangement is not that let the relevant parties share the risks all together in the process of pre-sale, but that let only the bank and purchaser share it. Then, the optimal principle of risk sharing is studied by analyzing the type of risks and participants in housing pre-sale system. On the basis of the principle, the optimal risk sharing models of linear and nonlinear cases by the risk utility is set up. At last the application of the model is discussed to explain the difference of mechanism of risk sharing to all kinds of participants.