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This master's thesis provides an in-depth insight into each aspect of behavioral biases in the real estate market environment and bidding behavioral effects in particular through analyzing its underlying implications based on theoretical considerations, regression analysis founded on a comprehensive survey as well as a meta-analysis. It aims to establish a theoretical baseline of real estate auctions along with fundamental aspects of behavioral economics and, in a second step, to give a compelling comparison between auctions and negotiated sales of real estate. Based on his earlier analysis, the author tries to identify relevant market implications and effects with respect to the real estate market and fundamental aspects of behavioral economics followed by a thorough conclusion recapitalizing the overall working process of this paper. The results show that in the real estate market investors do not seem to act rational, nor are their misconducts uncorrelated. This thesis does thus greatly challenges the foundations of market efficiency due to the existence of behavioral biases.
This book is a theory-led conceptual account of the Principal-Agent problem and related concepts of Behavioural Real Estate economics, a decade after the real estate crisis of 2008. Data from 52 qualitative interviews undertaken with appraisers, real estate brokers, and property owners is used to argue that the reality is more nuanced and influenced by the interests of the different real estate market actors. The book provides a sketch of the relationship dynamics between real estate investors and service providers in the markets of Austria and Central and Eastern Europe. While the investors manage real estate portfolios and have to deal with particular legal systems, regulations, and norms, they often appoint service providers who have a comprehensive understanding of the local context. This work aims to highlight that this relationship between the real estate market actors creates an information asymmetry that may constitute the basis of conflicts of interest as well as Principal-Agent problems. Furthermore, the work underlines that the services provided by appraisers and real estate brokers to investors may strongly influence the profit the investor can generate from a transaction. It could be therefore inferred that the investor inclines towards a certain type of result from a service provider over the others. The present research has revealed that the investors are guided by certain interests and undertake to steer the service providers in a favoured direction. This book is essential reading for anyone interested in the nuances of Behavioural Economics and real estate.
A nostalgic look at days when-- making a living demanded ingenuity as well as hard work; life, devoid of today's electronic media bombardment, was simple; and entertainment was derived from simple pleasures; family life was close-knit and relationships cherished; simple gifts were appreciated; parents practiced discipline; the Generation Gap had not been discovered; education was taken seriously; friendships endured; moral values were taught at home; value was placed on handmade things; authority was respected; reading was not a lost art; consciences were heeded.
Behavioral Economics: Evidence, Theory, and Welfare provides an engaging and accessible introduction to the motivating questions, real-world evidence, theoretical models, and welfare implications of behavioral economics concepts. Applications and examples — from household decisions, finance, public finance, labor, business, health, development, politics, education, energy, and sports — illustrate the broad relevance of behavioral economics for consumers, firms, markets, and policy makers alike. This textbook provides readers with both the intuition and analytical tools to apply behavioral economics concepts in understanding the complex social world. Each part of the book covers a key concept, beginning with a range of empirical evidence that is anomalous within the standard economics framework. In light of this evidence, a second chapter introduces and applies a nonstandard behavioral modeling approach. The last chapter of each part explores market reactions and policy responses to individuals behaving in nonstandard ways. Numerous exercises of varying types and levels provide readers the opportunity to check and enrich their understanding. The book’s clear structure orients readers to the many concepts of behavioral economics. It also highlights the process by which economists evaluate evidence and disentangle theories with different social welfare implications. Accessible to students from diverse economic backgrounds, this textbook is an ideal resource for courses on behavioural economics, experimental economics and related areas. The accompanying Solutions Manual further extends learning and engagement.
Over the last few decades behavioral economics has revolutionized the discipline. It has done so by putting the human back into economics, by recognizing that people sometimes make mistakes, care about others, and are generally not as cold and calculating as economists have traditionally assumed. The results have been exciting and fascinating, and have fundamentally changed the way we look at economic behaviour. This textbook introduces all the key results and insights of behavioral economics to a student audience. Ideas such as mental accounting, prospect theory, present bias, inequality aversion, and learning are explained in detail. These ideas are also applied in diverse settings such as auctions, stock market crashes, charitable donations and health care, to show why behavioral economics is crucial to understanding the world around us. Consideration is also given to what makes people happy, and how we can potentially nudge people to be happier. This new edition contains expanded and updated coverage of neuroeconomics, emotions, deception, and the contrast between group and individual behaviour, among other topics, to ensure that readers are kept up-to-speed with this fast-paced field. A companion website is also now available containing a test bank of questions and worked examples allowing users to see for themselves how changing the parameters can change the outcomes. This book remains the ideal introduction to behavioral economics for advanced undergraduate and graduate students.
This book provides a comprehensive introduction to modern auction theory and its important new applications. It is written by a leading economic theorist whose suggestions guided the creation of the new spectrum auction designs. Aimed at graduate students and professionals in economics, the book gives the most up-to-date treatments of both traditional theories of 'optimal auctions' and newer theories of multi-unit auctions and package auctions, and shows by example how these theories are used. The analysis explores the limitations of prominent older designs, such as the Vickrey auction design, and evaluates the practical responses to those limitations. It explores the tension between the traditional theory of auctions with a fixed set of bidders, in which the seller seeks to squeeze as much revenue as possible from the fixed set, and the theory of auctions with endogenous entry, in which bidder profits must be respected to encourage participation.
Twenty years ago, behavioral economics did not exist as a field. Most economists were deeply skeptical--even antagonistic--toward the idea of importing insights from psychology into their field. Today, behavioral economics has become virtually mainstream. It is well represented in prominent journals and top economics departments, and behavioral economists, including several contributors to this volume, have garnered some of the most prestigious awards in the profession. This book assembles the most important papers on behavioral economics published since around 1990. Among the 25 articles are many that update and extend earlier foundational contributions, as well as cutting-edge papers that break new theoretical and empirical ground. Advances in Behavioral Economics will serve as the definitive one-volume resource for those who want to familiarize themselves with the new field or keep up-to-date with the latest developments. It will not only be a core text for students, but will be consulted widely by professional economists, as well as psychologists and social scientists with an interest in how behavioral insights are being applied in economics. The articles, which follow Colin Camerer and George Loewenstein's introduction, are by the editors, George A. Akerlof, Linda Babcock, Shlomo Benartzi, Vincent P. Crawford, Peter Diamond, Ernst Fehr, Robert H. Frank, Shane Frederick, Simon Gächter, David Genesove, Itzhak Gilboa, Uri Gneezy, Robert M. Hutchens, Daniel Kahneman, Jack L. Knetsch, David Laibson, Christopher Mayer, Terrance Odean, Ted O'Donoghue, Aldo Rustichini, David Schmeidler, Klaus M. Schmidt, Eldar Shafir, Hersh M. Shefrin, Chris Starmer, Richard H. Thaler, Amos Tversky, and Janet L. Yellen.
Economists, psychologists, and marketers are interested in determining the monetary value people place on non-market goods for a variety of reasons: to carry out cost-benefit analysis, to determine the welfare effects of technological innovation or public policy, to forecast new product success, and to understand individual and consumer behavior. Unfortunately, many currently available techniques for eliciting individuals' values suffer from a serious problem in that they involve asking individuals hypothetical questions about intended behavior. Experimental auctions circumvent this problem because they involve individuals exchanging real money for real goods in an active market. This represents a promising means for eliciting non-market values. Lusk and Shogren provide a comprehensive guide to the theory and practice of experimental auctions. It will be a valuable resource to graduate students, practitioners and researchers concerned with the design and utilization of experimental auctions in applied economic and marketing research.
This comprehensive Handbook addresses a wide variety of methodological approaches adopted and developed by behavioural economists, exploring the implications of such innovations for analysis and policy.
Property market demand and supply viewHow can demand and supply determine property market price ? Property price is arrived at by the interaction between house buyers demand and property developers' houses number supply. Property price is dependent upon the house design and environment and facilities characteristics of both these fundamental components of a property market. Any properties demand and supply represent the willingness of house consumers and property developers to engage in properties buyers buying needs or desires. An exchange of a house purchasetakes place when properties buyers and properties sellers can agree upon a agreed property price. This module will look at property price in a competitive market. When imperfect property market competition exists such as with a property developer monopoly or single peoperty selling firm, property price outcomes may not follow the same general rules.Equilibrium Price in property marketWhen a property exchange occurs, the agreed upon price is called an "equilibrium" property price, or a "market clearing" price. This equilibrium property price occurs at the intersection of house demand and house supply as presented are in balance at the moment in property market short time, e.g. one month.Property price determination depends equally on the moment house buyers' living demand and the moment house number supply. It is truly a balance of the two market components. To see why the balance must occur, examine what happens when there is no balance, for example when the moment property market price is below than the past property market price, the property quantity demanded is greater than the property quantity supplied. In such a situation, property consumers would be clamouring for a property that property developers would not be willing to supply; a property shortage would exist. In this event, property consumers would choose to pay a higher price in order to get the property they want, while property developers would be encouraged by a higher price to bring more of the properties onto the property market.The end result is a rise in property price, when the moment has many proprety buyers feel living desire needs. where the property supply and demand are in balance. Similarly, if a property price is above were chosen arbitrarily the property market would be in shortage properties are supplied, too less properties supply are relative to high living desire demand. If that were to happen, properties developers would be willing to take a higher price in order to sell, and property consumers would be induced by higher prices to increase their property purchases desire, because they feel afraid that there will have less properties to be supplied to sell later and their prices will continue to raise in long time. Hence, a property market price is not necessarily a fair price, it is merely an outcome. It does not guarantee total living satisfaction on the part of house buyer and property seller. Typically some assumptions about the behaviour of property buyers and property sellers are made, which add a sense of reason to a property market price.