Diagnosing consumer confusion and sub-optimal shopping effort
Subtitle: theory and mortgage-market evidence
By: Susan E. Woodward, Robert E. Hall
Contributors: Hall, Robert E.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16007; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16007.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "Mortgage loans are leading examples of transactions where experts on one side of the market take advantage of consumers' lack of knowledge and experience.  We study the compensation that borrowers pay to mortgage brokers for assistance from application to closing.  Two findings support the conclusion that confused borrowers overpay for brokers' services: (1) A model of effective shopping shows that borrowers sacrifice at least $1,000 by shopping from too few brokers.  (2) Borrowers who compensate their brokers with both cash and a commission from the lender pay twice as much as similar borrowers who pay no cash"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/27/2010.

Includes bibliographical references.

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Mode of access: World Wide Web.