Real Estate Brokers, Nonprice Competition and the Housing Market

REAL ESTATE ECONOMICS, Vol. 24 No. 3

Posted: 14 May 1998

See all articles by Geoffrey K. Turnbull

Geoffrey K. Turnbull

Georgia State University - Department of Economics

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.

JEL Classification: R31

Suggested Citation

Turnbull, Geoffrey K., Real Estate Brokers, Nonprice Competition and the Housing Market. REAL ESTATE ECONOMICS, Vol. 24 No. 3, Available at SSRN: https://ssrn.com/abstract=9104

Geoffrey K. Turnbull (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-0419 (Phone)
404-651-2737 (Fax)

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