Brokers’ contractual arrangements in the Manhattan residential rental market

Bar-Isaac, Heski and Gavazza, Alessandro (2015) Brokers’ contractual arrangements in the Manhattan residential rental market. Journal of Urban Economics, 86 . pp. 73-82. ISSN 0094-1190

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Abstract

We bring new evidence to bear on the role of intermediaries in frictional matching markets and on how parties design contracts with them. Specifically, we examine two features of contracts between landlords and agents in the Manhattan residential rental market. In our data, 72 percent of listings involve exclusive relationships between landlords and agents (the remaining 28 percent are non-exclusive); and in 21 percent of listings, the landlord commits to pay the agent’s fee (in the other 79 percent, the tenant pays the agent’s the fee). Our analysis highlights that these contractual features reflect landlords’ concerns about providing agents with incentives to exert effort specific to their rental units and to screen among heterogeneous tenants.

Item Type:	Article
Official URL:	http://www.journals.elsevier.com/journal-of-urban-...
Additional Information:	© 2015 Elsevier B.V.
Library of Congress subject classification:	H Social Sciences > HC Economic History and Conditions
Sets:	Departments > Economics
Date Deposited:	12 Jan 2015 15:43
URL:	http://eprints.lse.ac.uk/60731/

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