We consider two famous phenomena from behavioral economics: loss aversion (based on prospect theory), and anchoring, for the role they played in the pricing of commercial property in the U.S. during the 2000s decade. We find that loss aversion played a major role, approximately as big as was...

This paper empirically tests for the predictions of prospect theory and the anchoring-and-adjustment heuristic in commercial real estate pricing. Using US market data, we confirm and extend previous findings in both housing and commercial real estate that loss aversion affects seller behavior in...

Price indices based on repeat sales are the most widely used type of real estate index based on asset transaction prices. But such indices are particularly prone to revision. When a new period of transaction data becomes available and is used to update the repeat sales model, all past index...