TY - JOUR
T1 - A Study of the Brokerage Cost Allocation in a Rental Housing Market with Asymmetric Information
AU - Ben-Shahar, Danny
PY - 2001
Y1 - 2001
N2 - We analyze the brokerage service cost allocation in the rental housing market. We explain the alleged inconsistent phenomenon of landlords only occasionally requiring tenants to incur mediation cost. We show that when asymmetric information is introduced, under which tenants' tenure horizon is unobservable to landlords, a separating equilibrium may be attained, in which the length of the tenant's tenure horizon is directly related to his share in the brokerage commission. Finally, we empirically examine and confirm a set of the model's assumptions and derivations within the rental housing-market framework.
AB - We analyze the brokerage service cost allocation in the rental housing market. We explain the alleged inconsistent phenomenon of landlords only occasionally requiring tenants to incur mediation cost. We show that when asymmetric information is introduced, under which tenants' tenure horizon is unobservable to landlords, a separating equilibrium may be attained, in which the length of the tenant's tenure horizon is directly related to his share in the brokerage commission. Finally, we empirically examine and confirm a set of the model's assumptions and derivations within the rental housing-market framework.
KW - Brokerage
KW - Rental housing
KW - Symmetric information
UR - http://www.scopus.com/inward/record.url?scp=0035638943&partnerID=8YFLogxK
U2 - 10.1023/A:1011116807927
DO - 10.1023/A:1011116807927
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AN - SCOPUS:0035638943
SN - 0895-5638
VL - 23
SP - 77
EP - 94
JO - Journal of Real Estate Finance and Economics
JF - Journal of Real Estate Finance and Economics
IS - 1
ER -
