||Decisions, decision-making, and decision support systems in real estate investment management
||Krieger, Patrick; Carsten Lausberg
||Purpose – To date there is no such thing as a real estate decision theory. If we want to understand real estate-related decisions we have to resort to general decision theories and adapt them to this asset class. In our paper we do so for real estate investments. More specifically we examine the characteristics of letting and other investment decisions, their integration in the decision-making process, and the technical means available to support the decision-makers. As a theoretical basis we use dynamic decision theory which is not as restrictive as other decision theories and better corresponds to the time-dependent and interdependent nature of many investment decisions. Based on our analysis and a case study we develop a set of forward-looking indicators for real estate investment decisions and a concept for a scoring-type decision support system.__Design / methodology / approach – At first we present an overview of the literature, covering sources from psychology, informatics, and real estate. Afterwards we employ a case study to demonstrate that dynamic decision theory better corresponds to reality than classical decision theory. Based on these findings we describe our view of real estate decision-making and set up criteria for decision support systems in real estate investment. __Findings – The literature review revealed that there are a lot of findings in the distinct research disciplines that have never been applied to real estate. Furthermore we found that interdependencies and feedback processes are typical for real estate investment decisions. Hence, dynamic decision theory seems much more applicable to develop suitable indicators and factors for a decision support system.__Research limitations / implications – More research is needed to validate the dynamics in cash flow pattern and to form a complete decision support system.__Originality – The paper provides a new viewpoint on decision-making in real estate investment and qualitative factors of decision support systems in this area.__Paper type – Literature review, viewpoint, case study_
|Year of publication:
||complexity, dynamic decision-making, decision support systems, key indicator, behavioural finance
Krieger, Patrick; Carsten Lausberg (2015).
Decisions, decision-making, and decision support systems in real estate investment management. 22nd Annual European Real Estate Society Conference in Istanbul, Turkey,