Regret Aversion and False Reference Points in Residential Real Estate

Posted: 25 Jan 2008

See all articles by Michael J. Seiler

Michael J. Seiler

Hawaii Pacific University - Department of Finance

Vicky L. Seiler

Johns Hopkins University

Stefan Traub

University of the German Federal Armed Forces - Department of Economics; University of the German Federal Armed Forces - DFG Research Group 2104

David M. Harrison

UCF; Texas Tech University

Abstract

This study empirically exams the combination of regret aversion and false reference points in a residential real estate context. Survey respondents were put in a hypothetical situation, where they had purchased an investment property several years ago. Hindsight knowledge about a foregone all time high was introduced. As hypothesized, respondents on average expressed higher regret if they had actively failed to sell at the all time high (commission scenario) than if they had simply been unaware of the potential gain (omission scenario). Women were found to be more susceptible to regret aversion and false reference points than men.

Keywords: residential, regret aversion, reference poin

Suggested Citation

Seiler, Michael J. and Seiler, Vicky L. and Traub, Stefan and Harrison, David M., Regret Aversion and False Reference Points in Residential Real Estate. Journal of Real Estate Research (JRER), Forthcoming. Available at SSRN: https://ssrn.com/abstract=1086678

Michael J. Seiler (Contact Author)

Hawaii Pacific University - Department of Finance ( email )

1132 Bishop Street, Suite 504
Honolulu, HI 96813
United States
808-544-1827 (Phone)
808-544-9306 (Fax)

Vicky L. Seiler

Johns Hopkins University ( email )

Baltimore, MD 20036-1984
United States

Stefan Traub

University of the German Federal Armed Forces - Department of Economics ( email )

Holstenhofweg 85
Hamburg, 22043
Germany

University of the German Federal Armed Forces - DFG Research Group 2104 ( email )

Holstenhofweg 85
Hmaburg, DE 22043
Germany

David M. Harrison

UCF ( email )

Orlando, FL 32816-1400
United States
407-823-1127 (Phone)

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

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