Abstract

http://ssrn.com/abstract=927232
 
 

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A Behavioral Analysis of Shanghai Real Estate 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

August 28, 2006


Abstract:     
In a field study, we identified an intriguing inconsistency between real estate developers' desired sales pattern (selling all apartments at the same rate) and the actual sales pattern (selling good apartments faster). We 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. We corroborated our explanation with controlled experiments using potential Shanghai homebuyers and actual Shanghai real estate developers as participants. To the best of our knowledge, this is the first research to relate the prominence principle to a real-world issue in one of the world's most active markets.

Number of Pages in PDF File: 37

Keywords: pricing, prominence, choice, matching, behavioral

JEL Classification: D12, L1, M31

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Date posted: August 29, 2006  

Suggested Citation

Hsee, Christopher K. and Dube, Jean-Pierre H. and Zhang, Yan, A Behavioral Analysis of Shanghai Real Estate Prices (August 28, 2006). Available at SSRN: http://ssrn.com/abstract=927232 or http://dx.doi.org/10.2139/ssrn.927232

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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