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Regret Aversion and False Reference Points in Residential Real Estate

Author

Listed:
  • Michael J. Seiler

    () (Old Dominion University 2154 Constant Hall, Norfolk, VA 23539)

  • Vicky L. Seiler

    () (Hawaii Pacific University 1132 Bishop Street; Suite 504-9, Honolulu, HI 96813)

  • Stefan Traub

    () (Universität Bremen, FB 7 Hochschulring 4, WIWI 0.02.1, D-28359 Bremen, Germany)

  • David M. Harrison

    () (Texas Tech University Lubbuck, TX 79409-2101)

Abstract

This study empirically exams the combination of regret aversion and false reference points in a residential real estate context. Survey respondents were put in a hypothetical situation, where they had purchased an investment property several years ago. Hindsight knowledge about a foregone all time high was introduced. As hypothesized, respondents on average expressed higher regret if they had actively failed to sell at the all time high (commission scenario) than if they had simply been unaware of the potential gain (omission scenario). Women were found to be more susceptible to regret aversion and false reference points than men.

Suggested Citation

  • Michael J. Seiler & Vicky L. Seiler & Stefan Traub & David M. Harrison, 2008. "Regret Aversion and False Reference Points in Residential Real Estate," Journal of Real Estate Research, American Real Estate Society, vol. 30(4), pages 461-474.
  • Handle: RePEc:jre:issued:v:30:n:4:2008:p:461-474
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    Citations

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    Cited by:

    1. Michael J. Seiler, 2014. "Measuring the Impact of Eminent Domain Partial Takings: A Behavioral Approach," International Real Estate Review, Asian Real Estate Society, vol. 17(2), pages 137-156.
    2. Marshall Gangel & Michael Seiler & Andrew Collins, 2013. "Exploring the Foreclosure Contagion Effect Using Agent-Based Modeling," The Journal of Real Estate Finance and Economics, Springer, vol. 46(2), pages 339-354, February.
    3. Eli Beracha & Michael Seiler, 2014. "The Effect of Listing Price Strategy on Transaction Selling Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 49(2), pages 237-255, August.
    4. I-Chun Tsai, 2018. "Investigating Gender Differences in Real Estate Trading Sentiments," The American Economist, Sage Publications, vol. 63(2), pages 187-214, October.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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