Asked by Cierra Jacobson on Jul 02, 2024
Verified
A house was for sale for 9 months with no offers at $350,000.It was taken off the market, and relisted 1 month later at $399,500 and sold in 2 weeks.Which of the following behavioral economic concepts could explain this scenario?
A) Hyperbolic discounting of housing values
B) Time inconsistency of preferences
C) Spurious information
D) Framing effects
E) Fairness norms
Framing Effects
The influence on an individual's decision-making caused by the way in which information is presented, rather than just the information itself.
Housing Values
The monetary worth assigned to residential properties, influenced by factors such as location, size, and condition.
- Gain insights into how the presentation of information affects decision-making and preferences.
Verified Answer
SS
Shreya Sheen5 days ago
Final Answer :
D
Explanation :
Framing effects can explain this scenario because the higher listing price may have altered potential buyers' perception of the house's value, making the property seem more desirable or valuable, leading to a quicker sale.
Learning Objectives
- Gain insights into how the presentation of information affects decision-making and preferences.