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of a house and the real estate broker hired by the seller. The model is then used to calibrate the broker's commission … to reduce prices generates faster sales and hence improves social welfare, the usual commission rate of 6 percent exceeds … the buyer's and seller's brokers and the agencies that employ these realtors) split the commission, then a 6 percent …
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This paper examines how the introduction of a direct trade alternative for buyers and sellers affects competition among middlemen. Direct trade makes middlemen’s supply and demand functions depend on both bid and ask prices, a feature we term interdependence. A simple model is used to...
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