Abstract

http://ssrn.com/abstract=1019069
 
 

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Is Dual Agency in Real Estate a Cause for Concern?


Vrinda Kadiyali


Cornell University - Samuel Curtis Johnson Graduate School of Management

Jeffrey Prince


Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

Daniel H. Simon


Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

March 1, 2008

Johnson School Research Paper Series No. 08-07

Abstract:     
We examine the effects of the regulation of dual agency in residential real estate transactions, for 10,888 transactions in Long Island, New York in 2004-2007. We find that dual agency has an overall null effect on sale price, but includes two opposing forces where buyer and seller interests might be compromised. The link between dual agency and timing of sales is less clear. These findings are robust to endogeneity bias. Although it appears dual agency does cause some market distortions, our analysis yields little evidence that prohibiting dual agency in real estate will increase welfare.

Number of Pages in PDF File: 48

Keywords: Conflict of interest, real estate, first resort selling, strategic pricing, leaning on the seller, time-to-sale

JEL Classification: K21, L41, L42, L85

working papers series





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Date posted: October 4, 2007 ; Last revised: May 13, 2014

Suggested Citation

Kadiyali, Vrinda and Prince, Jeffrey and Simon, Daniel H., Is Dual Agency in Real Estate a Cause for Concern? (March 1, 2008). Johnson School Research Paper Series No. 08-07. Available at SSRN: http://ssrn.com/abstract=1019069 or http://dx.doi.org/10.2139/ssrn.1019069

Contact Information

Vrinda Kadiyali
Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )
Ithaca, NY 14853
United States
607-255-1985 (Phone)
607-254-4590 (Fax)
Jeffrey Prince (Contact Author)
Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )
Bloomington, IN 47405
United States

Daniel H. Simon
Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )
1315 East Tenth Street
Bloomington, IN 47405
United States

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