Exploring Lithuanian Real Estate Crowdfunding Investors’ Rationality

Legenzova Renata () and Leckė Gintarė ()
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Legenzova Renata: PhD, associate professor at the Faculty of Economics and Management, Vytautas Magnus University, Lithuania. Address: S. Daukanto str. 28, Kaunas LT-44246, Lithuania.
Leckė Gintarė: PhD student at the Faculty of Economics and Management, Vytautas Magnus University, Lithuania. Address: S. Daukanto str. 28, Kaunas LT-44246, Lithuania.

Management of Organizations: Systematic Research, 2022, vol. 87, issue 1, 83-102

Abstract: The research aims to assess how rational investors are in making real estate crowdfunding investment decisions and weather similar rationality investors share common individual-level characteristics. The research data was collected through an online survey and investors’ rationality was assessed according to risk & return and behavioral biases criteria. Results revealed that 18% of the respondents were rational and as much as 78.1% of them demonstrated bounded rationality behavior. Further clustering of bounded rationality investors identified three distinct clusters and suggested that bounded rationality proved to be largely based on established behavioral biases rather than on failing to understand and apply risk and return criteria. In terms of individual-level characteristics, rationality of real estate crowdfunding investors significantly related to their financial knowledge, but not to their age, sex, income level, education, occupation, residence and interface with finance sector.

Keywords: crowdfunding; investor behavior; investor rationality; bounded rationality (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:morgsr:v:87:y:2022:i:1:p:83-102:n:7

DOI: 10.2478/mosr-2022-0005

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