Using Prospect Theory to Better Understand the Impact of Uncertainty on Real Estate Negotiations

Artie Zillante, Dustin C. Read and Michael Seiler ()

Journal of Real Estate Research, 2019, vol. 41, issue 1, 75-106

Abstract: Economic experiments are used to evaluate the impact of uncertainty on negotiations involving the assembly of land for real estate development. Consistent with the tenets of prospect theory, the results suggest landowners act to mitigate risk, as opposed to maximize gain, when the duration of negotiations are undefined and they face disadvantageous fallback positions in the event they do not reach an agreement to sell their properties. The experiments contribute to the study of behavioral economics by offering further evidence of psychological biases that can encourage individuals to act in ways that are inconsistent with neoclassical economic theory.

Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/10835547.2019.12091521 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rjerxx:v:41:y:2019:i:1:p:75-106

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rjer20

DOI: 10.1080/10835547.2019.12091521

Access Statistics for this article

Journal of Real Estate Research is currently edited by William Hardin and Michael Seiler

More articles in Journal of Real Estate Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().