The soft computing based model of investors’ condition and cognition on a real estate market

Abstract

Real estate is a significant tangible asset for every human. Many individuals typically make a property investment decision at least once in their lifetime. Humans have limited knowledge of the surroundings in which they live and a limited capacity to process information. When making decisions, the decision-maker seeks to simplify cognitive processes and prefers solutions that are satisfactory from the point of view of survival rather than ensuring maximum profit (especially financial). The goal of an aware decision-maker is not to have the most information but to have the 'right' information. On the other hand, information on the property market is called imperfect caused mainly by a lack of behavioral component that contains this 'missing' information. Due to this fact, the authors assumed to create the soft computing based model to provide a behavioral component for the identification of property investors' decision-making motives in the residential market. The results confirm that it is possible to indicate a pattern of the profiles of real estate entities according to particular categories of investors' condition and cognition.