[patio11]

Markets do not presume perfect information. They're a hack around the lack of it, because perfect information would make a price discovery / resource allocation mechanism unnecessary: you'd just use your godlike powers and pick the best investment at the optional price every single time. One of their handier properties is that they quickly aggregate valuable-but-imperfect information from an incredibly broad group of people to discover prices. They're certainly not perfect, but they often work.

[shawnee_]

You're right, my typo. I can't remember the exact verbatim text that my economics textbook cited, but one of the underlying assumptions of "market forces" economics is that information isn't unduly restricted; it's more or less accessible to any parties that want it. In this example, the MLS is blatant restriction of information, and it definitely creates information asymmetry.

[tptacek]

Far be it from me to stand athwart your argument against realtors, but: how effective can they be at seizing control of the market via the MLS? Yes, you have to be a real estate agent to list there, but when I bought my house in '05, I had no trouble at all getting access to MLS listings.

The MLS --- which, I probably agree, is a shady system --- is not some secret parchment guarded by the Stonecutters. Pretty much anyone can get access to it.

[thaumaturgy]

MLS availability varies from region to region according to the local board of realtors. And, even in regions where the MLS is generally available, that availability may be limited to specific agencies, with others not participating at all.

(Once upon a time I did some I.T. and software maintenance work for a number of local realtors and the local board.)

Oh, and also, various MLS interfaces (e.g. Paragon) provide a lot more information on properties than non-realtors have access to.