When Agents Are Partners

Abstract

This paper considers a market where there is an agency relationship between the providers of a service or agents and their clients. Agents can choose to work alone or to have a sharing agreement with other agents. The study shows that if the agent's relation with their clients is short lived, thens haring agreements worsen the agency relationship, but if agents and clients engage in long term relationships, then sharing can improve the agency relationship depending on the characteristics of the clients. The paper also shows that clients with a higher disposition to pay, and clients that are likely to need an agent more often, will choose to contract with sharing agents.