Unpacking Cognitive Biases against Property Market Actors
On 6 February 2020, the WHIG Amsterdam team organised an interactive session at the Dutch Research Council’s Synergy ’20 conference, bringing together an interdisciplinary group of academics and practitioners active in the Dutch property market.
The Synergy ’20 conference was held in Hilversum, the Netherlands, and brought together researchers, directors, policymakers and professionals from societal organisations to strengthen the position of Social Sciences and Humanities research in the Netherlands and beyond. With the Dutch Research Council (NWO) being one of WHIG’s funders, Tuna-Tasan-Kok and Sara Özogul were selected to present one of the 16 conference sessions, which covered a wide array of topics ranging from research ethics and LGBT-friendly housing schemes, to geo-engineering and medicine. Not only did this format provide an interesting platform to share our ongoing WHIG research, but it resulted in a diverse audience with limited or no prior knowledge about property markets. We took advantage of this situation to unpack widely held stereotypes and cognitive biases in relation to property market actors.
Following the conference’s theme of ‘changing societies’, the aim of our session was to demonstrate the complexity and dynamism of contemporary property development in the Netherlands. We placed special emphasis on the diversity of actors within the property industry, as opposed to the homogenous assumptions and stereotypes that we frequently encounter during our fieldwork in Amsterdam and when engaging with much of the existing literature on the topic. We were inspired by behavioural economics and psychology, fields which are much more developed than the spatial sciences, such as spatial planning and urban studies, when it comes to addressing the role of cognition, impressions, feelings and emotions in shaping our understanding and decision-making processes.
Critically acclaimed behavioural economist and Nobel Prize winner Daniel Kahneman has conducted fascinating work on cognitive biases. In his 2011 book Thinking, Fast and Slow, he provides a powerful account of how we like to perceive ourselves as rational and conscious beings, while our thinking and decision-making is much more driven by impressions and intuition than we would probably like to admit. The best we can do, as Kahneman (2011, 28) writes, is to “learn to recognize situations in which mistakes are likely and try harder to avoid significant mistakes when the stakes are high” (Kahneman, 2011, 28).
Following an introduction on the diversification and changes of the Dutch property market since the 2008 economic crisis, we set out to explore the cognitive biases of the session’s participants. We used an online tool that allowed for input from the audience’s smart phones and creates real-time word clouds. We asked the audience to enter the first words that come to mind when thinking about a property developer or investor. The resulting word cloud was striking, and pretty much in line with what we predicted: highlighting economic gain as well as negatively perceived attributes and effects such as speculation and gentrification.
Putting a human face on property development
The session proceeded by introducing ‘real’ property market actors and researchers who could provide insight into the diversity within the sector, illustrating the often neglected, human side of property development to the audience. Without losing our critical perspective, we intended to show the audience how difficult it is to generalise when it comes to developers and investors. Our first speaker Mariam Hussain from Multi Corporation vividly shared how she is confronted with homogenising assumptions, and has to navigate many stereotypes in her work and private life due to her job in the property industry. Our second speaker Jannes van Loon from the Association of Developers & Builders (NVB Vereniging voor Ontwikkelars & Bouwondernemers) provided insight into how many developers and construction firms have a much broader focus than solely for financial profit, which often include housing affordability, job stability for their employees and a passion for urban design.
Academics are not immune to cognitive biases either, and very often, scholars within a particular field share common assumptions at a particular moment in time. Therefore, we asked three researchers to reflect on their experience of cognitive biases within their disciplines, and to share anecdotes or experiences with property investors and developers gained during their own research. Michiel Stapper (University of Amsterdam, Political Sociology) talked about relationships between different developers and communities in Hamburg and Amsterdam, and the role of contractual arrangements in setting the framework for interaction. Martijn van den Hurk (Utrecht University, Public Administration/Human Geography/Planning) talked about the Regent Park redevelopment scheme in Toronto, in which a private developer took the lead to revitalise a deprived community in close collaboration with local residents. And Gert-Joost Peek (Amsterdam School of Real Estate & Hogeschool Rotterdam, Area Development/Real Estate Development/Transition Management) provided three perspectives on property actors: as a researcher and educator; as a practitioner in the development industry himself; and as an active citizen engaged in a project in Binckhorst, Den Haag.
These five pitches laid the foundation for an open discussion with audience interaction, in which participants shared diverse experiences. We concluded by critically reflecting on the initial associations generated in the word cloud at the beginning of the session, reiterating the importance of being aware of one’s own cognitive biases and the dangers of generalising property development actors.
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