suzanne comments on Bayesian Reasoning Applied to House Selling: Listing Price - Less Wrong

1 Post author: byrnema 26 August 2011 11:43PM

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Comment author: suzanne 27 August 2011 11:24:55AM 8 points [-]

You might want to consider a list price which is precise to $100 or $1000 rather than a round number, because the anchoring effect seems to be stronger when a price is more exact. The original paper is behind a paywall, but there's a summary in this article.

They looked at five years of real estate sales in Alachua County, Florida, comparing list prices and actual sales prices of homes. They found that sellers who listed their homes more precisely—say $494,500 as opposed to $500,000—consistently got closer to their asking price. Put another way, buyers were less likely to negotiate the price down as far when they encountered a precise asking price.