Behavioural biases among real estate investment decision makers: Has anyone seen my neo-cortex? I'm sure I left it here somewhere

Purpose – To examine whether investors in commercial real estate exhibit some important behavioural biases, namely: anchoring, herding, framing/nudging, loss aversion and over-confidence. If so, are there steps that investors and their agents ( fund managers and advisors) could take (a) to temper the effects of their own biases and (b) to exploit the presence of such biases in other market participants?Design/methodology/approach – Analysis of historic data sources at asset and market levels and over different time periods, with focus on identifying the specific biases listed above, singly and in combinationFindings – Understanding of behavioural bias merits greater attention.Research limitations/implications – Reliance on inferences from historic dataPractical implications – May help develop clearer understanding of market drivers and improved decision-making for market participants.Originality/value – New research within the real estate industry that could help investors understand the highly cyclical nature of commercial real estate investment marketsKeywords: behavioural biases – anchoring – herding – framing - loss aversion – over-confidenceArticle Classification: Viewpoint