Abstract

http://ssrn.com/abstract=1105520
 
 

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Prominence Effect in Shanghai Apartment Prices


Christopher K. Hsee


University of Chicago - Booth School of Business

Jean-Pierre H. Dube


University of Chicago - Booth School of Business

Yan Zhang


University of Chicago - Booth School of Business


Journal of Marketing Research, Vol. 45, No. 2, pp. 133-144, 2008

Abstract:     
A field study conducted in Shanghai identified a robust inconsistency between real estate developers' desired sales pattern (selling all apartments in a building at similar rates) and the actual sales pattern (selling good apartments faster). The authors explained this inconsistency with Tversky, Sattath, and Slovic (1988)'s prominence principle, according to which buyers, who were in a choice mode, weighed the desirability of floors more heavily than developers, who were in a matching mode when setting prices. This explanation is corroborated by controlled experiments involving potential homebuyers and professional real-estate price-setters. The research relates an intriguing anomaly originally found in paper-and-pencil surveys to a real-world issue in one of the world's most active markets. These findings also have implications for issues beyond real estate markets.

Number of Pages in PDF File: 22

Keywords: real estate, pricing, preference reversal, prominence effect, choice vs. matching

JEL Classification: D12, L1, M31

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Date posted: May 23, 2008  

Suggested Citation

Hsee, Christopher K. and Dube, Jean-Pierre H. and Zhang, Yan, Prominence Effect in Shanghai Apartment Prices. Journal of Marketing Research, Vol. 45, No. 2, pp. 133-144, 2008. Available at SSRN: http://ssrn.com/abstract=1105520

Contact Information

Christopher K. Hsee (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
Jean-Pierre H. Dube
University of Chicago - Booth School of Business ( email )
5807 South Woodlawn Avenue
Chicago, IL 60637
United States
HOME PAGE: http://gsb.uchicago.edu/fac/jean-pierre.dube
Yan Zhang
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
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