The role of buy-side anchoring bias: Evidence from the real estate market

Chang, Chuang Chang; Chao, Ching-Hsiang; Yeh, Jin Huei

doi:10.1016/j.pacfin.2016.02.008

Cited by 26 publications

(17 citation statements)

References 61 publications

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“…As a result, anchor value is an important factor. The anchoring effect is a robust idea that has been verified in different domains, including economic decision-making ( Oechssler et al, 2009 ), value evaluation ( Chang et al, 2016 ), and bank lending ( Dougal et al, 2015 ). Here, the subjects are accustomed to an adjustment process to make their estimates, but if they face a low anchor, the final estimates will be lower than those of someone who began with a high anchor ( Tversky and Kahneman, 1974 ; Northcraft and Neale, 1987 ).…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Influence of the Framing Effect, Anchoring Effect, and Knowledge on Consumers’ Attitude and Purchase Intention of Organic Food

Lei

Diao

2020

Front. Psychol.

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This article explores consumers' attitude toward and purchase intention of organic food regarding the influence of the framing effect and anchoring effect and the role of knowledge. Our findings suggest that whether message framing describes the benefits of buying organic food or the loss resulting from a failure to buy organic food, significantly influences consumers' attitude and purchase intention. In addition, presenting an anchor price in advertisements also significantly influences consumers' judgment. These results indicate that a negatively framed message induces a more favorable attitude and purchase intention than a positively framed message, a low anchor price is more favorable than a high one, and the interaction effect of framing and anchoring is not significant at the 1% level. Finally, consumers with less organic food knowledge are more susceptible to framing and anchoring effects. These results provide suggestions for appropriate message framing and price anchoring to enhance consumption within the organic industry.

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Section: Literature Review and Hypothesesmentioning

confidence: 99%

Influence of the Framing Effect, Anchoring Effect, and Knowledge on Consumers’ Attitude and Purchase Intention of Organic Food

Lei

Diao

2020

Front. Psychol.

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“…Since students are a special group and the laboratory experimental environment is different from reality, the external validity of these studies was questioned. Subsequently, further studies verified the objective existence and relative stability of the anchoring effect in terms of economic decision-making [28], value evaluation [29], and bank lending [30]. In general, research on the anchoring effect is carried out in the following three aspects.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Cognitive Biases of Consumers’ Risk Perception of Foodborne Diseases in China: Examining Anchoring Effect

Lei

Wang

et al. 2019

IJERPH

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Consumer cognitive biases arise from judgment and decision-making due to their limitations in information processing. As one of the important cognitive biases, the anchoring effect plays a significant role in interfering with consumers’ risk perception. With a stratified random approach, we collected survey data from 375 consumers in Wuxi, Jiangsu Province, China. Based on these data, this study attempted to analyze the anchoring effect in consumers’ risk perception of foodborne diseases (FBDs) and the differences in their perception before and after intervention in a contrast experiment using the anchoring index and the Wilcoxon signed-rank test. The results confirm the existence of the proposed anchoring effect. Moreover, the experimenter-provided anchor value, a history of FBD, and familiarity with FBD were found to be important factors influencing this anchoring effect. Therefore, improving consumers’ risk perception of FBD is critical to the long-term prevention of FBD risks by the government and consumers. The government should strengthen active monitoring, publicity, and education about FBD.

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“…Housing consumers may spend more time than usual in searching for the information that they need through research, enquiries and visual inspections. The time and money that they spend on searching are likely to reduce their WTP (Chang et al, 2016). This explains why informed decision makers typically make smarter decisions than others do.…”

Section: A Dummy Variablementioning

confidence: 99%

“…For example, real estate agents sell their own properties at a price higher than those of similar client-owned properties (Rutherford et al, 2007). Out-of-state buyers tend to have lower WTP than local buyers do because of higher search cost (Chang et al, 2016). Home buyers are willing to increase their WTP for green housing if they are provided with reliable and concrete information set by the government (Zhang et al, 2016).…”

Section: A Dummy Variablementioning

confidence: 99%

“…During a housing transaction, market players are likely to use their own limited information, limited experience and heuristic thinking to judge the value of a property. With information asymmetry and other factors at play, consumers may ultimately arrive at a biased housing decision which gives rise to differences between their perceived property value and a reasonable price (Chang, Chao, & Yeh, 2016;Eerola & Lyytikäinen, 2015).…”

Section: Introductionmentioning

confidence: 99%

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