IDEAS home Printed from https://ideas.repec.org/a/bla/reesec/v46y2018i4p971-990.html
   My bibliography  Save this article

Asymmetric Dominance and Its Impact on Mortgage Default Deficiency Collection Efforts

Author

Listed:
  • Michael J. Seiler

Abstract

The surge in mortgage default rates during the financial crisis has led to a corresponding dramatic increase in the type and number of firms who are entering the deficiency collection space. As such, we study the methods by which hedge funds and private equity collection firms can more profitably unwind this toxic debt. Specifically, we employ the theory of Asymmetric Dominance and find support that introducing a similar payment amount (i.e., a “decoy”) significantly induces borrowers to change their preference from one that is optimal for them to one that is suboptimal. We then employ the Left‐Most Digit effect in a new manner and demonstrate a statistically significant ability to mitigate the Asymmetric Dominance effect. Finally, we empirically find that Caucasians, males, and those of a greater net worth are more adept at avoiding violating the Independence of Irrelevant Alternatives axiom.

Suggested Citation

  • Michael J. Seiler, 2018. "Asymmetric Dominance and Its Impact on Mortgage Default Deficiency Collection Efforts," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 46(4), pages 971-990, December.
    • Handle: RePEc:bla:reesec:v:46:y:2018:i:4:p:971-990
    DOI: 10.1111/1540-6229.12176
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1540-6229.12176
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1540-6229.12176?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David M. Harrison & Kimberly F. Luchtenberg & Michael J. Seiler, 2023. "Improving Mortgage Default Collection Efforts by Employing the Decoy Effect," The Journal of Real Estate Finance and Economics, Springer, vol. 66(4), pages 840-860, May.
    2. Jackson T. Anderson & David M. Harrison & Michael J. Seiler, 2022. "Reducing Strategic Forbearance under the CARES Act: an Experimental Approach Utilizing Recourse Attestation," The Journal of Real Estate Finance and Economics, Springer, vol. 65(2), pages 230-260, August.
    3. Xun Bian & Zhenguo Lin, 2022. "Housing debt and elderly housing tenure choices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(5), pages 1360-1397, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reesec:v:46:y:2018:i:4:p:971-990. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/areueea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.