Incentives and performance in real estate brokerage

This article has two objectives. One is to offer a theoretical model to stu dy how the difference in commission structures affects the performance of a gents at full-commission firms (e.g., RE/MAX agents) relative to other agen ts. The other is to provide an empirical test of the relative performance o f full-commission agents. We predict that in equilibrium the selling price and the expected time it takes to sell a listing through a full-commission agent are the same as they are with a traditional agent. Our theoretical pr edictions are supported by our empirical results.