IDEAS home Printed from https://ideas.repec.org/a/vrs/remava/v24y2016i4p70-78n7.html
   My bibliography  Save this article

Compensation in Residential Real Estate Purchasers’ Decisions

Author

Listed:
  • Źróbek-Różańska Alina

    (Department of Economic and Regional Policy, University of Warmia and Mazury)

Abstract

Predicting demand on the residential real estate market and the behavior of the purchasers requires a wide knowledge of both the economic mechanisms and psychology of decision-making. Decisions on the real estate market are often made by people without professional skills, and using simplified strategies. However, the decision-making process, on top of its heuristic nature, is dynamic and changing. As a result, a discrepancy in the preferred characteristics of planned and actually bought real estate can be observed. Such a discrepancy can be explained with the occurrence of the compensation process. The aim of this article was to recognize and describe the compensation process on the example of the suburban residential real estate market. The aim was achieved by analyzing the preferences of potential buyers in terms of particular characteristics of the location of suburban plots destined for single-family housing (respondents divided into age groups: 25 and 26-40), analyzing the real settlement trend in the suburban zone (the result of actual transactions) and comparing the results, including compensation.

Suggested Citation

  • Źróbek-Różańska Alina, 2016. "Compensation in Residential Real Estate Purchasers’ Decisions," Real Estate Management and Valuation, Sciendo, vol. 24(4), pages 70-78, December.
    • Handle: RePEc:vrs:remava:v:24:y:2016:i:4:p:70-78:n:7
    DOI: 10.1515/remav-2016-0031
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/remav-2016-0031
    Download Restriction: no
    File URL: https://libkey.io/10.1515/remav-2016-0031?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Gigerenzer, Gerd & Todd, Peter M. & ABC Research Group,, 2000. "Simple Heuristics That Make Us Smart," OUP Catalogue, Oxford University Press, number 9780195143812.
    2. Weber, Thomas A., 2014. "On the (non-)equivalence of IRR and NPV," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 25-39.
    3. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-1326, December.
    4. Ho, Teck-Hua & Camerer, Colin & Weigelt, Keith, 1998. "Iterated Dominance and Iterated Best Response in Experimental "p-Beauty Contests."," American Economic Review, American Economic Association, vol. 88(4), pages 947-969, September.
    5. Shahid Ebrahim, M. & Hussain, Sikandar, 2010. "Financial development and asset valuation: The special case of real estate," Journal of Banking & Finance, Elsevier, vol. 34(1), pages 150-162, January.
    6. Leder, Johannes & Häusser, Jan Alexander & Mojzisch, Andreas, 2015. "Exploring the underpinnings of impaired strategic decision-making under stress," Journal of Economic Psychology, Elsevier, vol. 49(C), pages 133-140.
    7. de Palma, Andre & Motamedi, Kiarash & Picard, Nathalie & Waddell, Paul, 2005. "A model of residential location choice with endogenous housing prices and traffic for the Paris region," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 31, pages 67-82.
    8. Tietz, Reinhard, 1992. "Semi-normative theories based on bounded rationality," Journal of Economic Psychology, Elsevier, vol. 13(2), pages 297-314, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benito Arruñada & Marcos Casarin & Francesca Pancotto, 2012. "Are Self-regarding Subjects More Rational?," Working Papers 611, Barcelona School of Economics.
    2. Vincent P. Crawford & Nagore Iriberri, 2004. "Fatal Attraction: Focality, Naivete, and Sophistication in Experimental Hide-and-Seek Games," Levine's Bibliography 122247000000000316, UCLA Department of Economics.
    3. Strzalecki, Tomasz, 2014. "Depth of reasoning and higher order beliefs," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 108-122.
    4. Giovanna Devetag, 2000. "Transfer, Focality and Coordination: Some Experimental Results," LEM Papers Series 2000/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Willemien Kets, 2014. "Finite Depth of Reasoning and Equilibrium Play in Games with Incomplete Information," Discussion Papers 1569, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    6. Dengler, Sebastian & Prüfer, Jens, 2021. "Consumers' privacy choices in the era of big data," Games and Economic Behavior, Elsevier, vol. 130(C), pages 499-520.
    7. Baethge, Caroline, 2016. "Performance in the beauty contest: How strategic discussion enhances team reasoning," Passauer Diskussionspapiere, Betriebswirtschaftliche Reihe B-17-16, University of Passau, Faculty of Business and Economics.
    8. Alaoui, Larbi & Janezic, Katharina A. & Penta, Antonio, 2020. "Reasoning about others' reasoning," Journal of Economic Theory, Elsevier, vol. 189(C).
    9. Robert Slonim, 2005. "Competing Against Experienced and Inexperienced Players," Experimental Economics, Springer;Economic Science Association, vol. 8(1), pages 55-75, April.
    10. Chesney, Thomas & Chuah, Swee-Hoon & Hoffmann, Robert, 2009. "Virtual world experimentation: An exploratory study," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 618-635, October.
    11. Eizo Akiyama & Nobuyuki Hanaki & Ryuichiro Ishikawa, 2017. "It is Not Just Confusion! Strategic Uncertainty in An Experimental Asset Market," Economic Journal, Royal Economic Society, vol. 127(605), pages 563-580, October.
    12. Florian Gauer & Christoph Kuzmics, 2020. "Cognitive Empathy In Conflict Situations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(4), pages 1659-1678, November.
    13. Dorothea Kübler & Georg Weizsäcker, 2004. "Limited Depth of Reasoning and Failure of Cascade Formation in the Laboratory," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 425-441.
    14. Shapiro, Dmitry & Shi, Xianwen & Zillante, Artie, 2014. "Level-k reasoning in a generalized beauty contest," Games and Economic Behavior, Elsevier, vol. 86(C), pages 308-329.
    15. Trabelsi, Emna & Hichri, Walid, 2021. "Central Bank Transparency with (semi-)public Information: Laboratory Experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    16. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2016. "Fluid intelligence and cognitive reflection in a strategic environment: evidence from dominance-solvable games," PSE-Ecole d'économie de Paris (Postprint) hal-01359231, HAL.
    17. Seel, Christian & Tsakas, Elias, 2017. "Rationalizability and Nash equilibria in guessing games," Games and Economic Behavior, Elsevier, vol. 106(C), pages 75-88.
    18. Vincent P. Crawford & Nagore Iriberri, 2007. "Level-k Auctions: Can a Nonequilibrium Model of Strategic Thinking Explain the Winner's Curse and Overbidding in Private-Value Auctions?," Econometrica, Econometric Society, vol. 75(6), pages 1721-1770, November.
    19. Giovanna Devetag & Sibilla Guida & Luca Polonio, 2016. "An eye-tracking study of feature-based choice in one-shot games," Experimental Economics, Springer;Economic Science Association, vol. 19(1), pages 177-201, March.
    20. Kocher, Martin G. & Sutter, Matthias, 2006. "Time is money--Time pressure, incentives, and the quality of decision-making," Journal of Economic Behavior & Organization, Elsevier, vol. 61(3), pages 375-392, November.

    More about this item

    Keywords

    decision; compensation; real estate market;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:remava:v:24:y:2016:i:4:p:70-78:n:7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.