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IN "Commissions and Conflicts in Agency Arrangements," Saul Levmore explores unusual compensation structures that arise in a variety of agency relationships. Much of the paper focuses on the real estate industry, and on the 6 percent sales commission that so often governs residential real estate transactions. This emphasis is well placed as the real estate commission system does raise some puzzling issues. The remarkable prevalence of the 6 percent commission, irrespective of the value of the property to be sold or the effort required to sell the property, has led other writers to wonder whether anticompetitive behavior is present and has stimulated antitrust enforcement activity directed against the industry.' But anticompetitive explanations seem unsatisfying. The market structure of the industry seems ill suited to price fixing, with many agents serving most geographic areas and a relative ease of entry. Moreover, the 6 percent commission is found in widely disparate geographic markets, from Washington, D.C., to Chicago to Los Angeles, and it would seem odd that local real estate cartels had fixed the price at the same level everywhere. Finally, it is by no means impossi-

the journal of law and economics

Some Thoughts on the Real Estate Puzzle: Comment on Levmore, "Commissions and Conflicts in Agency Arrangements: Lawyers, Real Estate Brokers, Underwriters, and Other Agents' Rewards"