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Tour detour: Intermediaries' search diversion in rental markets
Hong Kong Polytech Univ, Dept Bldg & Real Estate, Hong Kong, Peoples R China.
Soochow Univ, Business Sch, Suzhou, Peoples R China.
KTH, School of Architecture and the Built Environment (ABE), Real Estate and Construction Management.ORCID iD: 0000-0001-5365-5690
2025 (English)In: Journal of Economic Behavior and Organization, ISSN 0167-2681, E-ISSN 1879-1751, Vol. 236, article id 107125Article in journal (Refereed) Published
Abstract [en]

This paper investigates how intermediaries with information advantages divert consumers' search in rental markets and lead to inefficient outcomes. Using unique data on tenants' initial preferences, property-showing sequences, and transaction records, we find that agents present suboptimal properties as the first option in property-showing sequences. Leveraging such door-in-the-face tactics, agents further guide tenants' choices through sequential adjustments. These diversion strategies are robust to exogenous shocks, market variations, and platform externalities. Such search diversion is a dominant strategy through which intermediaries benefit from an increasing transaction success rate, and transaction acceleration and increased transaction prices of suboptimal properties. However, search diversion leads to rental contracts offering unsatisfactory prices and quality, resulting in perceived utility losses for the diverted tenants, subjecting tenants to discrimination.

Place, publisher, year, edition, pages
Elsevier BV , 2025. Vol. 236, article id 107125
Keywords [en]
Search diversion, Agent, Property showing, Rental market
National Category
Economics Business Administration
Identifiers
URN: urn:nbn:se:kth:diva-371073DOI: 10.1016/j.jebo.2025.107125ISI: 001523180300001Scopus ID: 2-s2.0-105009088399OAI: oai:DiVA.org:kth-371073DiVA, id: diva2:2003934
Note

QC 20251006

Available from: 2025-10-06 Created: 2025-10-06 Last updated: 2025-10-06Bibliographically approved

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Yang, Zan

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CiteExportLink to record
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