Real Estate Economics | 2019

Using Experimental and Neurological Data to Gain a Deeper Understanding of Realization Utility Theory



Starting with the premise that realization utility theory helps explain trading behavior, this study combines a carefully crafted experimental design with functional magnetic resonance imaging technology to offer a more inclusive examination of factors that affect REIT trading behavior beyond whether a REIT is simply trading up or down. We add to the nascent field of neurological real estate by finding that local gains/loss domains are more relevant than are global gain/loss considerations, financial skewness is a significant determinant of trading behavior, and that performance inside the REIT market influences how hard subjects think when performing tasks outside the market.

Volume 47
Pages 1119-1162
DOI 10.1111/1540-6229.12164
Language English
Journal Real Estate Economics

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