Which one sells for more, and which one sells faster?

Adam Smith saw the problem in company directors, "the managers rather of other people's money than of their own". In 2005 the economists Steven Levitt and Chad Syverson tested it on about 98,000 house sales near Chicago, from 1992 to 2002; about 3,300 were the agent's own.

The agent's side: on an extra $10,000, the seller kept $9,400 and, after the splits, the agent kept about $150, while every extra week of showings cost the agent's time. So for the agent, a quick sale was the better deal. Economists call this the principal-agent problem.

Compared with similar houses on the same block, the agents' own houses sold for about 3.7 percent more and stayed on the market about nine and a half days longer. Not laziness: they waited for a better offer. And the gap shrank once house prices went online.

When someone acts for you, ask what they keep from each extra dollar. As Levitt put it: "They're not bad people, but they're people, and they respond to incentives."

The money bar and the dollar wedge are our drawings of the commission arithmetic in their data; commission rules have changed since.

So, which way did you guess?

Sources: Steven D. Levitt and Chad Syverson, "Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate", NBER Working Paper 11053, 2005 (Review of Economics and Statistics, 2008); NBC Today, 16 June 2005; Adam Smith, The Wealth of Nations, Book V (third edition, 1784).
Sounds: our own, made in code (earshot, CC0).