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- Title
Real Estate Brokers, Nonprice Competition and the Housing Market.
- Authors
Turnbull, Geoffrey K.
- Abstract
Given a fixed commission rate and easy entry, economic profits must be competed away on some nonprice margin in the real estate brokerage market. This paper focuses on nonprice competition in the level or quality of services offered buyers and sellers in the market, examining the equilibrium adjustment process, comparative static predictions and efficiency implications. In contrast with earlier studies focusing on wasteful advertising, this paper demonstrates that higher commission rates can either increase or decrease deadweight loss, depending upon how broker services affect buyer and seller transaction costs.
- Subjects
PROFIT; PROFITABILITY; MARGINAL pricing; MARGINS (Futures trading); DIRECT costing; REAL estate business; STOCKBROKERS; PURCHASING agents; ECONOMIC equilibrium; INDUSTRIAL efficiency; ADVERTISING; TRANSACTION costs
- Publication
Real Estate Economics, 1996, Vol 24, Issue 3, p293
- ISSN
1080-8620
- Publication type
Article
- DOI
10.1111/1540-6229.00692