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

Frédéric Cherbonnier and Christophe Lévêque
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Frédéric Cherbonnier: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Christophe Lévêque: GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique

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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 initial price estimation by more than 3%. This is observed upstream, when experts appraise the property for sale. Competition partially prevents brokers from biaising 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.

Keywords: Information revelation; Competition; Price appraisal; Real Estate Brokers (search for similar items in EconPapers)
Date: 2025-02-25
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