In the market, anchoring is even more important because wherever the market is anchored is the market expectations. As long as we have a price that we can anchor our expectations to, whether that be what we last paid for a TV or the price of a 42" that we saw in an ad, we have a coherent rational for why we would pay other prices. Without having seen other prices, we may not know how much we should be paying for the TV itself, but we know that a 52" TV is better than a 42" TV which is better than a 32" TV. The classic example uses the price for a big screen TVs. The idea of arbitrary coherence is that while we may not know how to value something in the first place, once we are anchored to a specific value we can more easily price similar things that are ranked relative to that anchor. As I was reading Dan Ariely's book, Predictably Irrational, I realized that the ideas of anchoring and arbitrary coherence can explain a lot about financial market behavior. 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.įor technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). 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. You can help adding them by using this form. We have no bibliographic references for this item. It also allows you to accept potential citations to this item that we are uncertain about. This allows to link your profile to this item. If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. See general information about how to correct material in RePEc.įor technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact. When requesting a correction, please mention this item's handle: RePEc:taf:jpropr:v:29:y:2011:i:1:p:49-68. You can help correct errors and omissions. 32(4), pages 323-348, April.Īll material on this site has been provided by the respective publishers and authors. " Change negotiation in public-private partnership projects through output specifications: an experimental approach based on game theory,"Ĭonstruction Management and Economics, Taylor & Francis Journals, vol. Housing Studies, Taylor & Francis Journals, vol. " Unintended consequences: the use of property tax valuations as guide prices in Wellington, New Zealand," Deborah Levy & Zhi Dong & James Young, 2016.International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. " Effect of Heuristic Factors and Real Estate Investment in Embu County, Kenya," Journal of Economic Psychology, Elsevier, vol. " Historical evidence for anchoring bias: The 1875 cadastral survey in Istanbul," Journal of Property Research, Taylor & Francis Journals, vol. " The influence of a decision support tool on real estate valuations," The Journal of Real Estate Finance and Economics, Springer, vol. " List Price Information in the Negotiation of Commercial Real Estate Transactions: Is Silence Golden?," " Nudging businesses to pay their taxes: Does timing matter?,"ħ60, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen. " Nudging Businesses to Pay Their Taxes: Does Timing Matter?,"ġ1599, Institute of Labor Economics (IZA).
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