OVERCONFIDENCE AND REAL ESTATE RESEARCH: A SURVEY OF THE LITERATURE

Helen X. H. Bao and Steven Haotong Li ()
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Helen X. H. Bao: Department of Land Economy, University of Cambridge, CB3 9EP, UK
Steven Haotong Li: Department of Land Economy, University of Cambridge, CB3 9EP, UK

The Singapore Economic Review (SER), 2016, vol. 61, issue 04, 1-24

Abstract: Real estate investment has recently been advancing rapidly in both volume and complexity. A sound understanding of behavioral issues in this sector benefits all stakeholders, such as investors, regulators and local residents. We focus on one of the most robust behavioral anomalies in business and finance research: overconfidence. Overconfidence significantly influences financial decision and investment performance. However, theoretical and empirical studies are lacking in real estate sector. We conduct a critical review of the overconfidence literature to bridge this gap, identify future research directions for the study of overconfidence in real estate markets, and suggest strategies to handle technical issues, such as the robustness of overconfidence measurement and data availability. Findings provide useful guidelines for researchers and practitioners to design and implement overconfidence studies in real estate research.

Keywords: Judgmental bias; behavioral finance; investment decision; overconfidence; real estate investment (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S0217590816500156

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