Tuesday, November 22, 2005
Royce de Rohan Barondes (University of Missouri at Columbia - School of Law) and V. Carlos Slawson Jr. (Louisiana State University, Baton Rouge - E.J. Ourso College of Business Administration) have posted Examining Compliance with Fiduciary Duties: A Study of Real Estate Agents on SSRN. Here's the abstract:
The traditional default rule in the United States has been that, where two brokerage firms participate in the sale of a piece residential real estate, both firms are fiduciaries of the seller. This article provides original empirical evidence showing to be erroneous a common assumption - that, in conflicts between their principals and third parties, real estate agents promote their principals' interests - underlying revisions made in a number of jurisdictions to those principles in the last twenty years.
This article examines whether agents act in accordance with their duties along two dimensions: First, we hypothesize that selling agents may secure business by taking actions that promote the interests of buyers to the detriment of selling agents' principals, the sellers, in ways that decrease sales prices. Second, we examine whether sellers receive worse sales prices where the selling and listing functions are divided between two firms. Such a relationship would be consistent with selling agents improperly seeking to promote buyers' interests, with intra-firm relationships restraining that misconduct better than inter-firm relationships.
The results support the conclusion that, to secure business, selling agents who are fiduciaries of sellers use actions that decrease the returns to their principals, with some evidence that the participation of a listing agent in the same firm as the selling agent partially restrains this activity. In sum, some economically significant malfeasance is not restrained by the duties imposed by law.
Monday, November 21, 2005
The New York Times has a story today about the current status of the New London project that gave rise to the Kelo litigation. Tom Blumer at BizzyBlog has some useful commentary on the Times story. Hat tip: Todd Zywicki.
A few weeks ago, I posted on some of Tom Merrill's remarks at the GELPI Takings Conference, where he described two frameworks for looking at issues like public use: the utilitarian frame and the moral rights frame. The utilitarian frame is concerned with promoting the common good, and as a result would favor a broad reading of "public use". The moral rights frame, in contrast, would be more concerned with a property owner's interest in maintaining possession of property, and as a result would favor a narrow reading of "public use".
I covered Kelo last week in my Property Theory seminar. In a reaction paper discussing the case, one of my students described the majority opinion as Vulcan, imagining the following conversation between Kirk and Spock:
Kirk: We can't just kick people out of their homes!
Spock: Captain, your concern about a few property owners is irrational; this taking is clearly for the greater good.
While Merrill's categories might have more academic appeal, I think that the Spock/Kirk distinction is a lot more fun. Plus, there is the somewhat unexpected result that Justice Stevens is playing the role of the arch-rational Spock, while Justice Thomas is playing the role of the emotional Kirk.
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