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The impact of competition on expert's information disclosure: the case of real estate brokers

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  • Cherbonnier, Frédéric
  • Lévêque, Christophe

Abstract

Competition can theoretically counter or reinforce tendency of experts to pass biased information to customers. Using data from an online company connecting real estate brokers with clients who want to sell their properties, we show that more competition or lower opportunity to collude induce brokers to raise their ini- tial price estimation by more than 3%. This is observed upstream, when experts appraise the property for sale. Competition partially prevents brokers from biais- ing downward evaluations, and is benecial to the client since it translates into a positive eect on listing and sale prices with no signicant eect on the time to sale.

Suggested Citation

  • Cherbonnier, Frédéric & Lévêque, Christophe, 2021. "The impact of competition on expert's information disclosure: the case of real estate brokers," TSE Working Papers 21-1255, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:126130
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    References listed on IDEAS

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    More about this item

    Keywords

    Information revelation; Competition; Price appraisal; Real Estate Bro-; kers;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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