Price and Preference: Interaction and Upselling in the Housing Market

Thursday, 2 July 2015: 8:30 AM-10:00 AM
CLM.2.04 (Clement House)
Max Besbris, New York University, New York, NY
Although price is a central component of economic transactions, we know little about how buyers come to pay the amounts they do. Drawing on a 23-month ethnographic case study of real estate transactions in New York, I argue that the prices buyers pay are not the outcomes of just structural or cultural forces, but are also the products of interaction with market intermediaries. This is highlighted by upselling, a common but heretofore unexamined phenomenon where a market intermediary induces a buyer to spend more money. I analyze the different interpersonal processes through which upselling occurred, showing how they vary across certain types of buyers and provide an empirical demonstration of interaction’s effects on economic transactions. Specifically, wealthier buyers were upsold at a higher rate due to interactional patters in the search process. This approach moves towards a more holistic view of prices that takes into account multiple levels of analysis. I conclude by discussing implications for scholarship on the sales process, demand and prices, and the microfoundations of markets more broadly.