טכניון מכון טכנולוגי לישראל
הטכניון מכון טכנולוגי לישראל - בית הספר ללימודי מוסמכים  
M.Sc Thesis
M.Sc StudentInbal Koren
SubjectBehavioral Economics in the Housing Market: Framing,
Anchoring, and the Law of Small Numbers
DepartmentDepartment of Architecture and Town Planning
Supervisor Dr. Ben-Shahar Danny
Full Thesis text - in Hebrew Full thesis text - Hebrew Version


Abstract

The present study examines the decision making process in the current Israeli housing market. Within the framework of the behavioral approach (e.g. Kahnman and Tversky, 1971, 1979), we investigate the tendency to rely on cognitive biases in the decision-making process in the housing market. In particular, we focus on the following four biases: the belief in price behavior, the Framing effect, the Anchor Price effect, and the Law of Small Numbers. The data unambiguously reveal a tendency to rely on such biases. Furthermore, socio-demographic variables, such as level of education, gender, and place of residence, are shown to be correlated with the extent to which these biases play a role in the decision-making process. This work is one of a handful of studies on the topic and with it, we provide much needed empirical evidence that may contribute to the development of policies within the public, the political and the commercial spheres.