The Anchoring Effect in Real Estate Decisions

Abstract The anchoring effect is one of the cognitive biases studied within the phenomena observed in psychology and behavioral economics. Through the anchoring effect, human judgments and decisions can be suboptimal due to excessive focus on random information. This phenomenon plays a significant role in many aspects of social and economic life, including the real estate market, leading to incorrect decisions among both consumers and professionals. The aim of this study was to evaluate the impact of the anchoring effect on decisions regarding the value of a random apartment among Polish specialists in real estate market, based on a simplified description of the apartment. The research group included real estate valuators, real estate brokers, real estate managers, and academicians. The sample size included 170 respondents. The research showed that the effect of “anchors” is evident in every professional group, regardless of the type of services provided, educational background, or years of professional experience. The anchoring index among the surveyed group was 46 percent. The study confirms that expertise in real estate market does not guarantee unbiased assessment, and therefore, there is a need to conduct the process of real estate evaluation in a careful way to increase the chances of obtaining trustworthy results.