Regret Aversion and False Reference Points in Residential Real Estate

Michael J. Seiler (), Vicky L. Seiler (), Stefan Traub () and David M. Harrison ()
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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
David M. Harrison: Texas Tech University Lubbuck, TX 79409-2101

Journal of Real Estate Research, 2008, vol. 30, issue 4, pages 461-474

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.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2008

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