ajaz_eco_204_2012_2013_chapter_16_Market_Power

They were making more money and the resulting

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Unformatted text preview: f Re/Max. The firm changed the rules on how commissions wer e split. Before Re/Max’s arrival, half an agent’s commission went to the brokerage. Re/Max soon let agents keep about 90% of their commission while charging them various fees. Agents started migrating to Re/ Max because of the better split. They were making more money and the resulting competition fo r listings led to lower commissions – and made listing on the MLS less expensive. Michael Polzler is executive vice president of Re/Max Ontario-Atlantic Canada. His father, Frank, helped found the firm in Canada. Mr. Polzler said brokers have gotten used to consumers having access to more information, but concedes the public site does not provide as much information as the private site. “The brokers are seeing much more detail. But it’s enough of a view for the average consumer,” said Mr. Pol zler. Phil Soper, the chief executive of Royal LePage, said the information on MLS that is accessible to the public is restricted by government rules. “There has been a real tightening of privacy guidelines,” he said, adding those guidelines are one reason historical sale pri ces on a property are not available to the public. 3. Analysis of Firms with Market Power: Assumptions and Framework In practice, f...
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