Market distortions with collusion of agents

Zhenguo Lin, Yingchun Liu and Jia Xie

Journal of Banking & Finance, 2024, vol. 162, issue C

Abstract: We investigate housing market distortions with the collusion of agents. The agency problem where agents sell clients' houses with price discounts while selling their own homes with price premiums is quite straightforward. However, the issue that agents collude with each other to further maximize their own interests is elusive. When agents collude, the resulting market distortions may even be worse than previous studies suggested. Indeed, this paper finds that the agency problem and market distortions are much more severe with agent collusion, as both the discounts associated with clients' houses and the premiums with agents' own homes become much larger when the two agents collude.

Keywords: Housing market; Price distortion; Collusion; Real estate agent (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:162:y:2024:i:c:s0378426624000712

DOI: 10.1016/j.jbankfin.2024.107151

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