This paper estimates the cost of using simple percentage fees rather than
the broker optimal Bayesian mechanism, using data for real estate transactions
in Boston in the mid-1990s. This counterfactual analysis shows that interme-
diaries using the best percentage fee mechanisms with fees ranging from 5.4%
to 7.4% achieve 85% or more of the maximum profit. With the empirically
observed 6% fees intermediaries achieve at least 83% of the maximum profit
and with an optimally structured linear fee, they achieve 98% or more of the
maximum profit