SEBASTIAN BOURBON. Overcoming uberization through knowledge asymmetry and cognitive rent
The new-build real estate market
Could the estate agent end up by disappearing? How can intermediation in the purchase of real estate be revisited in the digital age? What kind of organisational and management design should be envisaged to address this challenge? These are all strategic questions to which the real estate agency manager must find answers.
Research Impact(s): key results
In addition to modelling the way the new property market functions today, I aim to explore the positioning of the estate agent not as the consequence of an asymmetry of information between housing supply and demand, but as an asymmetry of knowledge. The real estate agent derives his legitimacy above all from the possession of tacit knowledge that cannot be accessed through digital technologies.
I have also developed a knowledge asymmetry assessment tool that identifies and measures knowledge asymmetry, positions the agent according to the identified asymmetry within a configuration table, and includes measurements of the estate agency’s knowledge management. I am currently promoting the tool and the concept of cognitive rent – in particular by relaying my recent publications – to major organisations in my sector for a larger scale implementation. Some of them have already shown great interest in the approach.
Finally, my DBA thesis revisits Jensen and Mecklings’ agency theory in the light of the current reality of the real estate agent’s work. In a recent publication, Mickael Jensen himself acknowledges the need to update his theory. According to him, the increased transparency of information generated by digital technology no longer allows the advantage of informational rent to be maintained. One of my proposals is to replace informational rent with the concept of cognitive rent, defined as: “intangible capital constituted through the accumulation, transformation and creation of implicit and explicit knowledge that gives a competitive advantage in a given market and/or a favourable position in a relationship with an interlocutor”.
The thinking underlying my work is structured around the notion of asymmetry of information in a market that uses intermediaries, i.e. the estate agent.
My preliminary research led me to choose Jensen and Mecklings’ agency theory (1976). It offers an interesting interpretation of the legitimacy of the intermediary in a market characterised by a strong asymmetry of information. This theory helps to understand how the agent becomes necessary in a situation where there is an imbalance of information between supply and demand. One of the two parties, called the “principal” (the client), will then enter into a moral and/or legal contract with the agent. The principal then mandates the agent to act on the market, through a lack of sufficient information to do so himself.
The methodological framework is based on action-research, the objective being to co-produce knowledge with the field studied, and to build a tool to identify and leverage knowledge asymmetries. A series of 42 semi-structured interviews were carried with players in the real-estate new build market, and then analysed using Sphinx™ software.
Following this, the initial roll-out phase of the tool was carried out in my company, IFIC Groupe Immobilier, thus enabling us to improve its performance after feedback from the field and to assess its actual managerial impact.
Further reading and viewing …
- “Vaincre l’ubérisation par l’asymétrie de connaissances et la rente cognitive”, (Overcoming uberization through knowledge asymmetry and cognitive rent), a book published by éditions EMS, 2020.
- “La rente cognitive, une arme stratégique pour vaincre l’ubérisation”, (Cognitive rent as a strayegy for overcoming unberization), an article co-written with Jean-Philippe Denis, in The Conversation, 6 January 2020.
- “La rente cognitive, une valeur refuge en temps de crise”, (Cognitive rent, a safe haven in times of crisis), published in the magazine Management & Data Science, 12 May 2020.
- “Du bon usage de la rente cognitive en temps de crise”, (Making good use of cognitive rent in times of crisis), a chapter published in the book edited by Michel Kalika, “L’impact de la crise sur le management”, (The impact of the crisis on management practice), a book published by éditions EMS, 2020.
- “Le prix DBA : le positionnement de l’agent immobilier sur le marché du neuf”, (The Business Science Institute Managerial Impact Prize: the positioning of the real estate agent on the new-build market), a video broadcast by Xerfi Canal.
Feedback from panel members
By formulating the concept of cognitive rent and by taking the risk of deriving a tool from it for the benefit of his employees and his organisation, Mr. Bourbon demonstrated that writing a DBA thesis can involve regenerating practices, which is first and foremost the ambition of a scientific contribution at the highest level. (Pr. Denis, thesis supervisor).
Prof. Pallud enjoyed reading the thesis, which deals with a topical issue, namely the need to adapt to changes in the market and in demand, in a context where the real estate sector is under danger from digital technologies and uberization. She cites the case of Liberkeys, a virtual real estate agency, which has managed to raise 5 million euros in two years, thus illustrating the arrival of new players in the real estate sector and the importance for agents to differentiate and transform themselves. (Pr. Pallud, member of the examination panel).