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Han, L. and Strange, W.C. (2014) The Microstructure of Housing Markets: Search, Bargaining, and Brokerage. In: Duranton, G., Henderson, V. and Strange, W.C., Eds., Handbook of Regional and Urban Economics, Vol. 5, Elsevier, Amsterdam, 813-886.
https://doi.org/10.1016/B978-0-444-59531-7.00013-2

has been cited by the following article:

• TITLE: The Information and Bargaining Roles of Commercial Brokers When Investors Are Uninformed

  AUTHORS: Jonathan A. Wiley, Yu Liu, Liang Guo, Paul Gallimore

  KEYWORDS: Principal-Agent, Commercial Real Estate

  JOURNAL NAME: Theoretical Economics Letters, Vol.9 No.5, June 27, 2019

  ABSTRACT: Market outcomes are contrasted for uninformed investors with and without broker representation to evaluate the information role, and for parties opposing the uninformed (with and without representation) to evaluate the bargaining role. The setting is a sample of 17,000 office building transactions in more than 100 US markets, and the identification strategy for uninformed investors is based on the nonlocal clientele effect. Nonlocal investors buy high and sell low, paying significant premiums in acquisitions and accepting discounted offers in divestitures. Employing a commercial broker is found to have virtually zero impact on this disparity. Moreover, when the opposite party has broker representation, the degree of overpayment by nonlocal buyers is even higher. These findings are at odds with the conventional notion that brokers possess a high degree of specialized market knowledge which can be used to offset informational disadvantages suffered by their clients.