Paper Number

ICIS2025-1733

Paper Type

Complete

Abstract

This study investigates how Virtual Reality (VR) adoption influences housing transactions on China’s largest online real estate platform. Using fine-grained behavioral data and an instrumental variable strategy leveraging staggered VR rollout across stores, we find that VR adoption lowers transaction prices (by 2.53%), extends time on market (by 83 days), and increases sale probability (by 5%). Mechanism analyses suggest that VR reduces information asymmetry, shifting advantage to buyers who become more selective and patient, reducing offline search intensity. In turn, sellers adjust prices more frequently and offer greater concessions. Notably, VR particularly benefits listings disadvantaged by initial perceptions—such as older or smaller units—by correcting buyer biases and improving match outcomes. Our findings highlight VR’s role as an information mechanism in high-value, two-sided markets and offer practical implications for platform design and strategic VR deployment.

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08-ImmersiveTech

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Dec 14th, 12:00 AM

Virtual Reality before Reality: the Impact of VR on Housing Transactions

This study investigates how Virtual Reality (VR) adoption influences housing transactions on China’s largest online real estate platform. Using fine-grained behavioral data and an instrumental variable strategy leveraging staggered VR rollout across stores, we find that VR adoption lowers transaction prices (by 2.53%), extends time on market (by 83 days), and increases sale probability (by 5%). Mechanism analyses suggest that VR reduces information asymmetry, shifting advantage to buyers who become more selective and patient, reducing offline search intensity. In turn, sellers adjust prices more frequently and offer greater concessions. Notably, VR particularly benefits listings disadvantaged by initial perceptions—such as older or smaller units—by correcting buyer biases and improving match outcomes. Our findings highlight VR’s role as an information mechanism in high-value, two-sided markets and offer practical implications for platform design and strategic VR deployment.

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