Preference Construction and Housing Choice: The Role of the Estate Agent

32 Pages Posted: 6 Feb 2011 Last revised: 23 Feb 2011

See all articles by Peter J. Scott

Peter J. Scott

University of Cambridge - Department of Land Economy

Colin Lizieri

University of Cambridge - Department of Land Economy

Date Written: February 3, 2011

Abstract

It is firmly established that human judgement and decision making can fall short of the standard required in the Behavioral Decision Theory of von Neumann and Morgenstern (1947). Consumers in particular seem vulnerable to systematic errors of judgement which affect their choice behaviour, opening the possibility that others might manipulate their preference formation (Thaler, 1980; Simonson and Tversky, 1992). This paper uses several economic experiments to investigate the nature of biases in housing search and choice, considering in particular the role of estate agents as choice architects, influencing behaviour and resulting in predictable biases in outcomes. The study indicates that consumers are vulnerable to several areas of manipulation consistent with existing literature in consumer choice, and evidence of a new bias, labelled choice pollution effect.

Keywords: Judgement, bias, housing choice

JEL Classification: C91, D3, D10

Suggested Citation

Scott, Peter J. and Lizieri, Colin M., Preference Construction and Housing Choice: The Role of the Estate Agent (February 3, 2011). Available at SSRN: https://ssrn.com/abstract=1754419 or http://dx.doi.org/10.2139/ssrn.1754419

Peter J. Scott (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

Colin M. Lizieri

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

HOME PAGE: http://www.landecon.cam.ac.uk/staff/profiles/clizieri.htm

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