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| Restructuring Agency Relationships in the Real
Estate Brokerage Industry: An Economic Analysis Author: Thomas Miceli, Katherine A. Pancak and C. F. Sirmans Start Page:31 Abstract: Recent state
legislative reforms of real estate agency relationships suggest that traditional agency
law and practice are not meeting the needs of the parties involved in a residential real
estate purchase and sales transaction. In this article, we argue that this is due, at
least in part, to the bundling of information and representation services provided by
brokers. This bundling results in a tradeoff between the benefits of buyers and sellers in
sharing information prior to a match, and the cost to the parties individually of
revealing information during bargaining. We conclude that, from an economic perspective,
effective agency reform must solve this basic conflict, perhaps by unbundling the matching
and representation functions. |
