Optimal Price and Selling Effort from the Perspectives of the Broker and Seller

This paper uses numerical solutions of a dynamic optimization model to examine the principal-agent relationship between the seller and broker in residential real estate markets. Potential conflict of interest is quantified in two dimensions, the level of selling effort the broker puts forth, and the reservation price for the property. The dynamic optimization model reveals that the use of a finite duration listing contract will induce the broker to increase his or her effort level compared to an unlimited duration contract, and that the broker's optimal effort will increase over time, becoming greater as the listing contract expiration time draws nearer ("rational procrastination"). The numerical analysis indicates that with plausible parameter values, conflict of interest problems regarding broker effort level are minor or nonexistent near the end of the listing contract, but potentially important near the beginning of the contract. In contrast, the conflict of interest regarding reservation price is more severe near the end of the listing contract and is exacerbated by the use of finite duration contracts, the more so the shorter the contract.     

Cutting-sdge technologies computer software: strategic industry

US- owned firms account for more than 60% of worldwide computer software sales, and US capability in software tachnology is widely viewed as well ahead of that in other countries. However, the US lead cannot be expected to last. Nor are policies yet in place intended to protect exisitng advantages. Japanese firms have demonstrated their capabilities in hardware. Japanese firms have demonstrated their capabilities in hardware. Japanses exxecutives know they must develop better software in order (1) to use their own computer systems to best advantge, and (2) to sell more hardware in export markets. The next several devades will see a gradual slippage in the US position, particularly as foreign software suppliers move away from custom programming an realted services, their present focuse. A narrowing gap between US and foreign industries could prefigure a competitive challenge in software, development not unlike earlier challenges in microelectronics. Better software,. in addition, will have impacts elsewhere.In Japan's case, for example, improvements in softwarte should lead to productivity enhancements throughout the economy, improving Japan's ability to tmpete internationally.     

Time on the Market and Selling Price

This study is primarily an analysis of tradeoff between selling time and price, both on a nominal and real basis. Sellers are seen as desiring to maximize their discounted real selling price and trading off the nominal selling price with expected selling time. The time a property remains on the market is important, not only because of its reflection on price, but also because of its possible reflection on the issue of submarket equilibrium—an assumption in most urban price studies. The empirical results of this study shed light on how similar studies can easily misinterpret the implications of time on the market on price and how further work may be improved.