{"id":973,"date":"2020-04-28T16:57:49","date_gmt":"2020-04-28T08:57:49","guid":{"rendered":"http:\/\/localhost:8888\/?p=973"},"modified":"2025-12-25T16:01:43","modified_gmt":"2025-12-25T08:01:43","slug":"over-confidence-and-cycles-in-real-estate-markets-cases-in-hong-kong-and-asia","status":"publish","type":"post","link":"https:\/\/www.gssinst.org\/irer\/2020\/04\/28\/over-confidence-and-cycles-in-real-estate-markets-cases-in-hong-kong-and-asia\/","title":{"rendered":"Over-Confidence and Cycles in Real Estate Markets: Cases in Hong Kong and Asia"},"content":{"rendered":"\t\t
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Article<\/div>

Over-Confidence and Cycles in Real Estate Markets: Cases in Hong Kong and Asia<\/p>

Author<\/p>

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Volume<\/p>

Issue Number<\/p>

Year<\/p>

Publication<\/p><\/div>

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Ko Wang, Yuqing Zhou, Su Han Chan, and K.W. Chau<\/p>

93 \/ 108<\/p>

3<\/p>

1<\/p>

2000<\/p>

International Real Estate Review<\/p><\/div>

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Abstract<\/p>


Studies on the calibration of subjective probabilities find that people tend to over-estimate the precision of their knowledge. In this paper we develop a semi-rational model and apply it to the real estate markets in Hong Kong and other Asian countries. The key point is that a person is rational about her\/his private information until her\/his private information is confirmed by a clearly defined market signal. Using a pre-sale as a mechanism of updating a developer’s beliefs, this paper analyzes the impact of over-confidence on overbuilding and cycles in real estate markets. Our finding indicates that a pre-sale activity will increase the magnitude of over-building and over-confidence will increase the volatility in real estate markets. Our model also has implications to the well-established literature dealing with the issue of over-capacity in many industrial sectors.<\/p>

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View PDF -https:\/\/doi.org\/10.53383\/100023<\/strong><\/a><\/p>

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Author<\/p>\n

Start Page \/ End Page<\/p>\n

Volume<\/p>\n

Issue Number<\/p>\n

Year<\/p>\n

Publication<\/p>\n<\/div>\n

\n<\/p>\n

Ko Wang, Yuqing Zhou, Su Han Chan, and K.W. Chau<\/p>\n

93 \/ 108<\/p>\n

3<\/p>\n

1<\/p>\n

2000<\/p>\n

International Real Estate Review<\/p>\n<\/div>\n

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