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An Analysis of Common Sales Agents

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  • Anming Zhang

Abstract

This article presents an analysis of common sales agents based on their precommitment role when sellers are better informed about the products than potential buyers. The author shows that an exclusive channel can create a cost, owing to the inability of exclusive sellers to commit themselves to sales impartiality. Independent noncooperative firms may use common agents as a precommitment to sales impartiality. The author demonstrates that common sales agency can arise as an equilibrium outcome in the absen ce of cost savings, marketing advantages, or the Bernheim-Whinston collusion effect. The analysis shows that common agency of this type can be welfare improving.

Suggested Citation

  • Anming Zhang, 1993. "An Analysis of Common Sales Agents," Canadian Journal of Economics, Canadian Economics Association, vol. 26(1), pages 134-149, February.
  • Handle: RePEc:cje:issued:v:26:y:1993:i:1:p:134-49
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    Cited by:

    1. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    2. Paul Anglin & Richard Arnott, 1999. "Are Brokers' Commission Rates on Home Sales Too High? A Conceptual Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(4), pages 719-749.

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