Transaction costs are thought to affect asset prices and market liquidity, but the direction and magnitude of these effects continues to be the subject of debate. In the single family residential market discount brokers offer to list a house for a lower price and thus reduce the transaction...

In a standard auction, bidders bid more aggressively when the number of bidders increases. However, Krishna and Rosenthal (1996, Games and Economic Behavior) show that when bidders have multiple-unit demand that generates positive synergies, bidders bid less aggressively as the number of bidders...

We examine the impact of transaction costs, short selling restrictions and divisibility of assets on market efficiency in experimental asset markets. We find that transaction costs do not exacerbate the inefficiency of the market. They reduce the magnitude of bubbles and push prices closer to...

We offer a theoretical and empirical comparison of auctions and negotiated sales. We first build a simple model to show that auctions generate a higher relative price than negotiated sales when demand for the asset is strong, when the asset is more homogeneous, and when the asset attracts buyers...

Equitable redemption is a feature of all common law mortgages that allows a borrower a chance to redeem the real estate in the event of default. What is puzzling is that equitable redemption is universally enforced in all mortgages, including commercial mortgages. The purpose of this study is to...

We report an experiment designed to investigate markets with consumer search costs. In markets where buyers are matched with one seller at a time, sellers are predicted to sell at prices equal to buyers' valuations. However, we find sellers post prices that offer a more equal division of the...

Previous research (Rutherford et al., 2005; Levitt and Syverson, 2005) identify and quantify agency problems in the brokerage of single-family houses. Real estate agents are found to receive a premium when sellling their own houses in comparison to similar client-owned houses. Given the homogeneity...

We report experimental results on the relative performance of simultaneous and sequential versions of the Abreu-Matsushima mechanism. Under the simultaneous version subjects typically use undominated strategies, but apply only a limited number of iterations of dominance. Consequently the unique...