On Availability Discrimination under Rent Control

Statistical discrimination and search theory approaches are used to consider the behavior of a landlord with a vacant rental unit. Often, and especially under rent control, rents cannot be differentiated by tenant type, although the expected (maintenance and removal) costs of observationally separable tenant groups may differ. Assuming that prospective tenants appear according to a random process when sought, we solve the landlord's decision problems: (i) whether he should search for a tenant or keep the rental unit unoccupied and (ii) if search is undertaken, how long he should wait for a good tenant.