Brokers’ contractual arrangements in the Manhattan residential rental market

Heski Bar-Isaac and Alessandro Gavazza

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We bring new evidence to bear on the role of intermediaries in frictional matching markets and on how parties design contracts with them. Specifically, we examine two features of contracts between landlords and agents in the Manhattan residential rental market. In our data, 72 percent of listings involve exclusive relationships between landlords and agents (the remaining 28 percent are non-exclusive); and in 21 percent of listings, the landlord commits to pay the agent’s fee (in the other 79 percent, the tenant pays the agent’s the fee). Our analysis highlights that these contractual features reflect landlords’ concerns about providing agents with incentives to exert effort specific to their rental units and to screen among heterogeneous tenants.

Keywords: brokers; rental markets; Manhattan (search for similar items in EconPapers)
JEL-codes: N0 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2015-03-01
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (11)

Published in Journal of Urban Economics, 1, March, 2015, 86, pp. 73 - 82. ISSN: 0094-1190

Downloads: (external link)
http://eprints.lse.ac.uk/60731/ Open access version. (application/pdf)

Related works:
Journal Article: Brokers’ contractual arrangements in the Manhattan residential rental market (2015)
Working Paper: Brokers' contractual arrangements in the Manhattan residential rental market (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:60731

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