The Welfare Effects of Non-Price Competition Among Real Estate Brokers
AbstractThis paper examines the role of brokers in economizing on transaction costs in the housing market. By lowering the cost of transactions, brokers create welfare gains compared to a market in which buyers and sellers transact on their own. However, if brokers engage in unproductive, non-price competition to acquire a larger share of available listings, then some of the welfare gains are dissipated. Using a partial equilibrium model, this paper shows how an excessive commission rate can lead to this result. Copyright American Real Estate and Urban Economics Association.
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Bibliographic InfoArticle provided by American Real Estate and Urban Economics Association in its journal Real Estate Economics.
Volume (Year): 20 (1992)
Issue (Month): 4 ()
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- John D. Benjamin & G. Donald Jud & G. Stacy Sirmans, 2000. "What Do We Know About Real Estate Brokerage?," Journal of Real Estate Research, American Real Estate Society, vol. 20(1), pages 5-30.
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- Bruce, Donald & Santore, Rudy, 2006. "On optimal real estate commissions," Journal of Housing Economics, Elsevier, vol. 15(2), pages 156-166, June.
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- Thomas Miceli & Katherine Pancak & C. Sirmans, 2007.
"Is the Compensation Model for Real Estate Brokers Obsolete?,"
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Springer, vol. 35(1), pages 7-22, July.
- Thomas J. Miceli & Katherine A. Pancak & C. F. Sirmans, 2006. "Is the Compensation Model for Real Estate Brokers Obsolete?," Working papers 2006-23, University of Connecticut, Department of Economics.
- Sirmans, C. F. & Turnbull, Geoffrey K., 1997. "Brokerage Pricing under Competition," Journal of Urban Economics, Elsevier, vol. 41(1), pages 102-117, January.
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