4min chapter

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Steven Levitt on Freakonomics and the State of Economics

EconTalk

CHAPTER

The Market Forcers Don't Always Impinge on Those Small Decisions

When a real estate agent is selling a house that she herself owns, it's her her name's on the title verse. When she's representing a client and is going to get a commission - if she charges an extra 25 thousands dollars for the house, she gets the whole 25 thousand. If she sells the client's house for an extra 25 thousand, she only gets the commission of that, which is quite small. So your argument is that there's a a attention mis alignment of incentives, where the agent wants to set a lower price for the house than the owner when it's she'srepresenting a client. Ive never liked it because, in my view, people are relatively rational

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