The Effect of Anchoring Bias on the Estimation of Asking and Transaction Prices in the Housing Market
This paper investigates the anchoring bias in the real estate market, focusing on the impact of uninformative random values on price estimations. Through a randomized controlled trial, the study examines whether selective accessibility contributes to the anchoring effect and to what extent the bias...
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| Format: | Article |
| Language: | English |
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Sciendo
2024-12-01
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| Series: | Real Estate Management and Valuation |
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| Online Access: | https://doi.org/10.2478/remav-2024-0031 |
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| author | Węgrzyn Joanna Kuta Julia |
| author_facet | Węgrzyn Joanna Kuta Julia |
| author_sort | Węgrzyn Joanna |
| collection | DOAJ |
| description | This paper investigates the anchoring bias in the real estate market, focusing on the impact of uninformative random values on price estimations. Through a randomized controlled trial, the study examines whether selective accessibility contributes to the anchoring effect and to what extent the bias is transmitted from estimated asking prices to transaction prices on the primary housing market. The study was conducted in 2023 among Krakow University of Economics students on the example of the Krakow housing market in Poland. A multiple regression model indicates that randomly assigned numbers serve as cues affecting price estimations, with potential differences of up to 10.5% of the asking price offered by a developer. Additionally, gender and decision-making competencies influence estimation patterns, suggesting varying attitudes towards price-setting strategies that can be implemented by developers. These findings contribute to understanding the complexities of decision-making in real estate markets and highlight avenues for further research. |
| format | Article |
| id | doaj-art-c4092f6f64ff43068e60a91ae4ef8c3c |
| institution | Kabale University |
| issn | 2300-5289 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Real Estate Management and Valuation |
| spelling | doaj-art-c4092f6f64ff43068e60a91ae4ef8c3c2025-01-02T05:59:44ZengSciendoReal Estate Management and Valuation2300-52892024-12-0132411110.2478/remav-2024-0031The Effect of Anchoring Bias on the Estimation of Asking and Transaction Prices in the Housing MarketWęgrzyn Joanna0Kuta Julia1Department of Real Estate and Investment Economics, Krakow University of Economics, ul. Rakowicka 27, 31-510Kraków, PolandDepartment of Real Estate and Investment Economics, Krakow University of Economics, ul. Rakowicka 27, 31-510Kraków, PolandThis paper investigates the anchoring bias in the real estate market, focusing on the impact of uninformative random values on price estimations. Through a randomized controlled trial, the study examines whether selective accessibility contributes to the anchoring effect and to what extent the bias is transmitted from estimated asking prices to transaction prices on the primary housing market. The study was conducted in 2023 among Krakow University of Economics students on the example of the Krakow housing market in Poland. A multiple regression model indicates that randomly assigned numbers serve as cues affecting price estimations, with potential differences of up to 10.5% of the asking price offered by a developer. Additionally, gender and decision-making competencies influence estimation patterns, suggesting varying attitudes towards price-setting strategies that can be implemented by developers. These findings contribute to understanding the complexities of decision-making in real estate markets and highlight avenues for further research.https://doi.org/10.2478/remav-2024-0031anchoringbehavioral real estatehousingexperimentpolandc91d10d91r30 |
| spellingShingle | Węgrzyn Joanna Kuta Julia The Effect of Anchoring Bias on the Estimation of Asking and Transaction Prices in the Housing Market Real Estate Management and Valuation anchoring behavioral real estate housing experiment poland c91 d10 d91 r30 |
| title | The Effect of Anchoring Bias on the Estimation of Asking and Transaction Prices in the Housing Market |
| title_full | The Effect of Anchoring Bias on the Estimation of Asking and Transaction Prices in the Housing Market |
| title_fullStr | The Effect of Anchoring Bias on the Estimation of Asking and Transaction Prices in the Housing Market |
| title_full_unstemmed | The Effect of Anchoring Bias on the Estimation of Asking and Transaction Prices in the Housing Market |
| title_short | The Effect of Anchoring Bias on the Estimation of Asking and Transaction Prices in the Housing Market |
| title_sort | effect of anchoring bias on the estimation of asking and transaction prices in the housing market |
| topic | anchoring behavioral real estate housing experiment poland c91 d10 d91 r30 |
| url | https://doi.org/10.2478/remav-2024-0031 |
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