Exploring the use of dual-processing in commercial property development decision making under conditions of risk and uncertainty

Robson, Simon and Greenhalgh, Paul (2023) Exploring the use of dual-processing in commercial property development decision making under conditions of risk and uncertainty. Property Management. ISSN 0263-7472 (In Press)

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Official URL: https://doi.org/10.1108/PM-11-2022-0084


Commercial property development builds floor space in anticipation of potential, but unknown, future demand, making it particularly prone to risk and uncertainty. The research explores the degree to which property developer decision-making is objective and rational and the degree to which it relies on behavioural instincts and intuition. Decision-making theory, including heuristics, is considered and its prevalence in the field of commercial property development is examined.

A “dual-processing” decision-making model, comprising intuitive System 1 and objective System 2 processing, is proposed and tested. Inductive research using template analysis of interviews, with “high status” commercial property developers, explored whether the model offers an accurate representation of developers' behaviour and effective lens through which to examine decisions made under conditions of risk and uncertainty.

Participants believed they adopted objective and rational approaches to complex commercial property development decisions. Analysis of interviews reveals that System 1 heuristics and intuition play significant roles in decision-making behaviour, leading to potential bias and systematic error. The research concludes that the dual-processing model provides a useful lens through which to better understand the decision-making approach adopted by commercial property developers.

The research represents the rare application of behavioural theory to the realm of commercial property development and provides new and original insight as to how important investment decisions are made under conditions of risk and uncertainty, with implications for professional practice.

Item Type: Article
Uncontrolled Keywords: decision making, heuristics, Dual Processing Theory, real estate development, uncertainty, risk, commercial property, property development
Subjects: K100 Architecture
K400 Planning (Urban, Rural and Regional)
Department: Faculties > Engineering and Environment > Architecture and Built Environment
Depositing User: Rachel Branson
Date Deposited: 17 Feb 2023 09:35
Last Modified: 14 Mar 2023 16:15
URI: https://nrl.northumbria.ac.uk/id/eprint/51424

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