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What conditions would a seller prefer the second contract

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Reference no: EM132066199

Consider two commission schemes for selling a $2 million home: 6% of the sale price; and 5% per dollar of the sale price up to $1,800,000 and 15% per dollar after $1,800,000. Compare a real estate agent's incentives created by the two contracts. Under which conditions would an agent prefer the second contract? Under what conditions would a seller prefer the second contract?

Reference no: EM132066199

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