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The Psychology of Property Law$
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Stephanie M. Stern and Daphna Lewinsohn-Zamir

Print publication date: 2020

Print ISBN-13: 9781479835683

Published to NYU Press Scholarship Online: September 2020

DOI: 10.18574/nyu/9781479835683.001.0001

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PRINTED FROM NYU Press SCHOLARSHIP ONLINE (www.nyu.universitypressscholarship.com). (c) Copyright University of NYU Press Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in NYSO for personal use.date: 13 April 2021

Transacting Property

Transacting Property

Chapter:
(p.135) 5 Transacting Property
Source:
The Psychology of Property Law
Author(s):

Stephanie M. Stern

Daphna Lewinsohn-Zamir

Publisher:
NYU Press
DOI:10.18574/nyu/9781479835683.003.0006

This chapter examines how the psychology of cognition, decision making, and deception affects buyers and sellers in real estate transactions. The chapter describes how some aspects of property law, such as standardized forms of property (e.g., fee simple ownership, leasing) may reduce information-processing costs and enhance understanding of transactions. Yet other laws, such as property defect disclosure, fail to respond to buyers who struggle to process, update, and price complex, late-coming information and sellers who are subject to motivated reasoning and tendencies toward deception. The chapter also considers emerging psychological evidence on conflicts of interest that calls into question the prevailing approach of allowing dual agency by brokers (i.e., representing both buyer and seller).

Keywords:   Schemas, bounded rationality, sunk costs, optimism bias, anchoring, motivated reasoning, deception, dual agency, nudges, debiasing

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